FISCAL NOTE
Date Requested: February 22, 2017
Time Requested: 01:09 PM |
| Agency: |
Health and Human Resources, WV Department of |
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| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2444 |
Introduced |
SB397 |
|
|---|
| CBD Subject: |
Actions, Suits and Liens |
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FUND(S):
0403 - DIV OF HUMAN SERVICES GENERAL ADMINISTRATION FUND, 8722 - CONS FEDERAL FUNDS DIV HUMAN SERVICES GEN ADMN FD
Sources of Revenue:
General Fund,Other Fund Federal
Legislation creates:
Neither Program nor Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The purpose of this bill is to grant sovereign immunity to healthcare workers who provide free medical care to low-income citizens or provide Medicaid services to low-income families or government employees insured by PEIA.
The Department estimates a cost to the Medicaid program of approximately $1,000,000 per year in lost subrogation related to medical malpractice claims ($729,000 and $271,000 State funds). Additionally there is great concern related to policy and legal issues related to the proposed legislation and additional costs which cannot be identified.
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 |
1,000,000 |
1,000,000 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
1,000,000 |
1,000,000 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
The above estimate is based on subrogation collections for medical malpractice for the most recent complete year of data (SFY16) of approximately $1M. Using SFY18 blended state FMAP of 72.9%Federal/27.1%State that is approximately $729,000 Federal funds and $271,000 State funds.
Memorandum
Currently, in the Medicaid program, if a provider commits medical malpractice on the beneficiary, and there is a recovery, Medicaid is entitled to subrogation for amounts it spent on the beneficiary after the malpractice took place (related to the malpractice). The proposed legislation would eliminate those subrogation claims/collections for the program. Other issues are as follows:
• The bill is potentially discriminatory against Medicaid (and other public health program) members (takes away their right to sue for malpractice) – policy concern, legal concern
• The bill leaves the only remedy for Medicaid members who are victims of malpractice as the Court of Claims – so not only would Medicaid lose subrogation money, it would actually put the fiscal burden of malpractice of Medicaid (and other public health program) providers on the state – fiscal burden, potentially major
• The bill mandates certain provisions be placed into our contracts with providers such as ones dealing with emergency care referrals – policy concern, potential legal concern
• (Generally) this bill shifts the burden of medical negligence on the part of Medicaid (and other public health program) providers from the providers to the State and leaves patients who are victims of medical malpractice with little remedy (maybe a small recovery with the Court of Claims). This could actually create an access issue since it would require Medicaid to carefully screen providers to determine those that have had a history of frequent malpractice instances, in order to protect the state – policy concern, fiscal burden
There are also administrative requirements within the legislation that would increase the Department's Bureau for Medical Services administrative costs. At this time there is not enough information to calculate an annual cost estimate, however the current subrogation contractor retains 11.45% of gross collection as the administrative component. Based on $1.08M, the administrative costs would have been $123K. The additional administrative tasks are:
• Receiving and tracking reports of “adverse incidents and information and treatment outcomes” from all Medicaid providers
• Providing written notice to each Medicaid member, which has to be acknowledged in writing, that the provider is an agent of the Department and as such the provider has sovereign immunity and their sole remedy in the event of malpractice is an action in the Court of claims
• Annual reporting to legislature
Person submitting Fiscal Note: Bill J. Crouch
Email Address: dhhrbudgetoffice@wv.gov