FISCAL NOTE
Date Requested: January 14, 2026
Time Requested: 04:21 PM |
| Agency: |
Bureau for Medical Services |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1909 |
Introduced |
SB231 |
|
|---|
| CBD Subject: |
Health |
|---|
|
FUND(S):
0483 Bureau for Medical Services Administration; 0484 - Bureau for Medical Services Policy and Programming; 8722 - Cons Federal Funds Div Human Services Gen Admn Fd
Sources of Revenue:
Other Fund General and Federal
Legislation creates:
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The purpose of this bill is to require value-based contracting for substance use disorder, to require value-based outcomes for grants, and requires a state plan amendment to the extent necessary.
The Department estimates an annual increase of $12,997,223 (state = $2,638,812/federal = $10,358,412) from this legislation. This estimate does not take into account any potential long-term cost savings. However, these are purely hypothetical at this point. At this time, the Department of Human Services has no way to confirm this will result in savings or the amount of any such savings.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2026
Increase/Decrease
(use"-") |
2027
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
12,997,223 |
5,913,903 |
| Personal Services |
0 |
313,903 |
313,903 |
| Current Expenses |
0 |
12,683,320 |
5,600,000 |
| 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):
Projected initial increased cost is $12,997,223 (state = $2,638,812/federal = $10,358,412) with ongoing costs of $5,913,903 (state = $1,297,152/federal = $4,616,751).
Estimated staffing is $313,903 which includes Salaries totaling $232,521 for one Program Manager 1 position at $82,277 and two Program Manager 2 positions at $75,122 each ($150,244). Employee Benefits is estimated at 35% for a total of $81,382 ($232,521 x 35%). State share is at administrative rate of 50%.
Current expense estimates total $12,683,320 ($2,481,860 state share) for initial year and $5,600,000 ($1,140,200 state share) ongoing.
Additional costs for reporting needs is estimated at $100,000 ($50,000 state share), based on actuaries from prior reporting. Additional reports would increase cost estimate. State share is at administrative rate of 50%.
While the cost of Substance Use Disorder (SUD) Value Based Payments (VBP) will vary depending on the design, it is typical for new VBP programs to be designed as quality incentives, assuming the investment in quality will lead to long-term savings. Medicaid currently spends over $80 million per year on SUD IMD, residential, peer support, and methadone services. If we assume quality payments of 5%, this would be an added cost of $4 million ($715,200 state share) per year. Blended FMAP used = 82.12% (based on expansion FMAP = 90%, non-expansion FMAP = 74.243%).
Contract expenses related to implementation is projected to be $1,583,320 ($791,660 state share). Costs are based on contract changes for Establishment of Value Based Measures ($769,920), Implementation of Value Based Payments ($532,580), and CMS Authority ($280,820). State share is at administrative rate of 50%.
Estimated cost for System upgrades to current system as assessed by Department data analyst is $1,000,000 for implementation and $500,000 ongoing operations. New data sources are estimated to cost $4,500,000 for implementation and $1,000,000 ongoing operations. Total estimated cost is $7,000,000 (with $1,500,000 ongoing). State share ($925,000 for implementation and $375,000 ongoing) for implementation is 10% with operational costs at 25%.
Not included in estimates above is the increase in managed care capitation payments. While the costs will vary by MCO, adding additional staff and IT costs will increase the administrative expenses for each MCO, resulting in an increase to capitation payments. That increase to the State is undetermined at this time.
Memorandum
Parts of this plan cannot be operationalized or generated from data, others can be, but at a very high cost. The majority of the systems costs includes forecasting the cost of connecting with law enforcement, county sheriff offices, city police departments, state police, and other entities that track arrests and "law enforcement interactions". This does not take into consideration the cost for whomever would be needed to get the data to Medicaid.
§16-67-3 (a). Establishment of value-based measures by October 1, 2026 is an extremely tight timeline for this to be accomplished.
§16-67-3 (c). Time overlaps between billing and billing corrections could indicate false overbilling.
§16-67-3 (d). Delays due to toxicology reports may conflict with reporting request.
Duplicative language at lines 16 and 18, "All providers shall be given a synthetic identifier in the report to allow trends to be followed in multiple years."
Person submitting Fiscal Note: Alex J. Mayer, MSA, PMP, DoHS Cabinet Secretary
Email Address: osafiscalnotes@wv.gov