FISCAL NOTE

Date Requested: March 02, 2021
Time Requested: 11:40 AM
Agency: Public Employees Insurance Agency (PEIA)
CBD Number: Version: Bill Number: Resolution Number:
2686 Introduced SB516
CBD Subject: Insurance


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 PEIA plan to meet reimbursement standards for inpatient rates as related to the Inpatient Prospective Payment System Diagnostic Related Group assigned amount in effect for the federal fee for service component of the Medicare program. This bill will create an estimated $30 million increase to PEIA hospital reimbursement. In addition to the direct payments PEIA currently makes to WV hospitals for inpatient services, WV also remits $7 million of money originally earmarked for PEIA to the WV Bureau for Medical Services (BMS.) This $7 million results in an additional $28 million of reimbursement for WV Hospitals and is commonly known as the ‘Medicaid Swap.’ PEIA requests consideration of this reimbursement in the discussion of this bill. Additionally, PEIA currently exceeds Medicare reimbursement for all other forms of reimbursement to hospitals. For outpatient services, PEIA pays 111% of Medicare. This is estimated at $15 million greater than Medicare reimbursement. Additionally, for hospital owned physician practices, PEIA exceeds Medicare reimbursement for physician services by approximately $15 million. Reimbursement for Critical Access Hospitals is at 100% of Medicare. PEIA requests consideration of these reimbursement levels in the discussion of this bill. Further, Medicare reimbursement is based upon significant analysis of agreed upon cost reporting by Medicare and national hospital representation. The primary goal of these cost reports is to assure appropriate costs are included to determine reasonable reimbursement levels for appropriate patient care at US hospitals. PEIA has recently adjusted reimbursement levels at the request of WV providers to improve reimbursement; and will continue to work with our WV providers to assure they are appropriately reimbursed. PEIA welcomes further discussions regarding reimbursement to improve healthcare in WV, while assuring WV tax dollars and PEIA members’ premiums are utilized as effectively as possible.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2021
Increase/Decrease
(use"-")
2022
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 30,000,000
Personal Services 0 0 0
Current Expenses 0 0 30,000,000
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):


This bill will create an estimated $30 million increase to PEIA WV hospital inpatient reimbursement.



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