Date Requested: May 24, 2017
Time Requested: 11:09 AM
Agency: Health and Human Resources, WV Department of
CBD Number: Version: Bill Number: Resolution Number:
4033 Introduced HB114
CBD Subject: Governor -- Bills Requested By


FUND(S):

0525 - CONSOLIDATED MEDICAL SERVICES FUND, 5156 - HOSPITAL SERVICES REVENUE ACCOUNT, 0403 - DIV OF HUMAN SERVICES GENERAL ADMINISTRATION FUND

Sources of Revenue:

General Fund

Legislation creates:

Decreases Existing Revenue, Decreases Existing Expenses, Creates New Fund:



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


    The purpose of this bill is to divest of the facilities; land; buildings and improvements; contents; employment, patient and contractual interests; licenses; and all other assets excluding any cash, cash equivalents and marketable securities of the long-term care facility known as Hopemont Hospital.
    The bill establishes a fund called the "Hopemont Long Term Care Facility Development Fund" to consist of appropriations to effectuate the sale of Hopemont Hospital. The fund will consist of any revenue or sale proceeds.
    The Department anticipates a positive fiscal impact related to this bill. Due to the age of this facility (104 years old), structural repairs needed for the facility were estimated by an engineering firm at $14.6M in SFY2011. These costs only rise each year due to insufficient funding to make needed repairs.
    The Department anticipates selling the beds from this facility to the private sector. As part of the sale, the entity would be required to build a replacement facility in the same general area, transfer the patients to the new facility and hire all of the staff. The Department estimates a state savings to be approximately $3M per year.
    
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2017
Increase/Decrease
(use"-")
2018
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 -8,323,617
Personal Services 0 0 -4,777,775
Current Expenses 0 0 -3,545,842
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 -5,264,428


Explanation of above estimates (including long-range effect):


    Based on SFY2016 data, Hopemont had expenditures of $9,746,819 and revenue of $5,264,428 for a net loss of $4,482,391.
    Estimating paying a private entity approximately $243.26 per day (including cost for construction), Medicaid payments would total $5,043,817 (with $1,423,202 being state funding). This estimate is based on approximately 57 bed facility. This would net a state savings of $3,059,189 (4,482,391-1,423,202).
    The timeline has not yet been determined but it is not believed this can be accomplished prior to the end of SFY2018, therefore amounts reflected above are for future years.
    



Memorandum


    Please identify any areas of vagueness, technical defects, reasons a bill would not have a fiscal impact, and/or any special issues not captured elsewhere on this form.



    Person submitting Fiscal Note: Bill J. Crouch
    Email Address: dhhrbudgetoffice@wv.gov