FISCAL NOTE
Date Requested: February 08, 2019
Time Requested: 09:04 AM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2823 |
Introduced |
SB546 |
|
|---|
| CBD Subject: |
Health, Taxation |
|---|
|
FUND(S):
Medicaid State Share Fund
Sources of Revenue:
Other Fund Medicaid State Share Fund
Legislation creates:
Creates New Revenue, Increases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to impose a contingent tax increase on eligible acute care hospitals to maximize federal funding in order to increase practitioner payment fee schedules for practitioners employed by eligible acute care hospitals and health systems.
According to our interpretation, the proposed bill would impose an additional tax on acute care hospitals at a rate of 0.13 percent beginning on or after July 1, 2019 through June 30, 2021. Passage of this bill could increase tax collections by roughly $4.95 million in FY2020, $5.4 million in FY2021 and $450,000 in FY2022. Given that this proposed new funding program is necessarily contingent on prior federal approval from the Center for Medicare and Medicaid, the exact timing of any collections is highly uncertain.
Additional administrative costs incurred by the State Tax Department would be $55,000 in FY2019 and $10,000 in each of the fiscal years thereafter.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2019
Increase/Decrease
(use"-") |
2020
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
55,000 |
10,000 |
10,000 |
| Personal Services |
10,000 |
10,000 |
10,000 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
45,000 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
-4,950,000 |
-5,400,000 |
Explanation of above estimates (including long-range effect):
According to our interpretation, the proposed bill would impose an additional tax on acute care hospitals at a rate of 0.13 percent beginning on or after July 1, 2019 through June 30, 2021. Passage of this bill could increase tax collections by roughly $4.95 million in FY2020, $5.4 million in FY2021 and $450,000 in FY2022. Given that this proposed new funding program is necessarily contingent on prior federal approval from the Center for Medicare and Medicaid, the exact timing of any collections is highly uncertain.
Additional administrative costs incurred by the State Tax Department would be $55,000 in FY2019 and $10,000 in each of the fiscal years thereafter.
Memorandum
The stated purpose of this bill is to impose a contingent tax increase on eligible acute care hospitals to maximize federal funding in order to increase practitioner payment fee schedules for practitioners employed by eligible acute care hospitals and health systems.
The bill does not accomplish its stated purpose. This bill adds a new tax, in addition to the taxes imposed under §11-27-9, §11-27-15, and §11-27-38, on the providers of inpatient and outpatient hospital services. This bill adds an additional tax of 0.13% on the gross receipts received or receivable by “eligible acute care hospitals and health care systems” that provide inpatient or outpatient hospital services in this state.
The bill states that its intended purpose is to “maximize federal funding to increase practitioner payment fee schedules for practitioners employed by eligible acute care hospitals and health systems.”
The definition of “eligible acute care hospital and health system” in this bill is the same as the definition of “eligible acute care hospital” in W. Va. Code §11-27-38. The fact that this bill adds the term “health system” without further defining it may cause some confusion.
There are portions of this bill that are vague and unclear. It is unclear how the Tax Department will be able to determine when it is time for the tax to be imposed and what is meant by “the payment methodology”. The bill calls for penalties and interest to be deposited into a dedicated fund called the “Eligible Acute Care Practitioner Fund.” However, this does not appear to be a currently existing fund and the bill does not authorize its creation in the State Treasury. The bill also fails to provide how the money is to be used to support increasing practitioner fee schedules. Lastly, it is unclear whether the tax proceeds will be able to be used for federal matching funds. For example, the proceeds do not appear to be going into the Medicaid State Share Fund, like W. Va. Code §11-27-38.
The bill title fails to mention retroactivity or the internal effective date. The bill title also fails to mention that bill defines terms, establishes a new fund, sets how the proceeds may be used, and the conditions that must occur before the tax may be imposed and collected.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov