FISCAL NOTE
Date Requested: January 10, 2020
Time Requested: 01:15 PM |
| Agency: |
Public Employees Insurance Agency (PEIA) |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1676 |
Introduced |
SB291 |
|
|---|
| CBD Subject: |
Health |
|---|
|
FUND(S):
PEIA Basic Insurance
Sources of Revenue:
Special Fund
Legislation creates:
Increases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The purpose of this bill is to require the Public Employees Insurance Agency and other health insurance providers provide mental health parity between behavioral health, mental health, substance use disorders and medical and surgical procedures. Although PEIA’s benefits materially meet mental health parity without code revision, there will be some increases in costs to the plan from this bill.
The first cause pertains to the bill’s provision to afford coverage at out of network (OON) providers at the same cost to the member as a network provider. PEIA offers an in-State provider in-patient substance abuse program that is not fully utilized by members. In the rare event services aren’t available in WV, PEIA utilizes the United Health Choice Plus national provider network. This is an extensive network with minimal coverage gaps. This will afford minimal exposure to OON claims for the above services.
Based on a review of claims over two years of behavioral health as the primary diagnosis code, PEIA identified less than three percent of claims submitted by OON providers. However, hidden demand is possible as a member could simply not submit an uncovered claim for an OON provider to insurance. Due to this potential of unknown demand for OON providers, PEIA assumes a 20% increase in OON claims. Assuming a 10% discount, PEIA estimates this cost to be $579,000.
The second cause of increased costs to PEIA is the provision to pay for treatment during concurrent review. Services that were previously deemed medically unnecessary per accepted medical standards must now be paid prior to this determination. Assuming a 5% increase in inpatient treatment days and a 1% increase in outpatient encounters results in an increase of $156,000 and $90,000 respectively.
The total cost of these provisions is an estimated $825,000 per year.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2020
Increase/Decrease
(use"-") |
2021
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
825,000 |
825,000 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
825,000 |
825,000 |
| 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):
Please explain increases and decreases in personal services, current expenses, repairs and alterations, assets, other costs and revenues, including assumptions and data sources and delineation between start-up and ongoing costs. Please also include a long-range schedule of costs and revenues if fiscal impact is expected to vary in 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: Jason Haught
Email Address: jason.a.haught@wv.gov