FISCAL NOTE
Date Requested: February 28, 2022
Time Requested: 09:13 AM |
| Agency: |
Bureau for Medical Services |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2254 |
Comm. Sub. |
HB4393 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
FUND(S):
5090 - Medicaid State Share Fund
Sources of Revenue:
Special Fund
Legislation creates:
Increases Revenue From Existing Sources
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The purpose of this bill is to add an inflator to the managed care tax based upon changes in the capitation rates for Medicaid managed care and eliminate the sunset date.
In the proposed legislation the tax rate would increase proportionally to Medicaid capitation rates. The proposed legislation will provide for the MCO tax to grow at the same rate as the Medicaid managed care capitations, keeping it aligned with inflation and easing budgetary pressures. It will likely help it to grow tens of millions per year in nominal dollars, while holding its inflation-adjusted value to the Medicaid program constant.
In FY2023, the estimated inflation factor is 3.6%, this would bring the tax collections to $46.9 million and matched with the federal FMAP of 74.185% would equate to $228.5 million.
The passage of this legislation will increase Medicaid revenues by $46.9 million due to the prior sunset date (including $1.6 million related to the inflation language).
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2022
Increase/Decrease
(use"-") |
2023
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
0 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
46,900,000 |
46,900,000 |
Explanation of above estimates (including long-range effect):
In FY2023 the estimated inflation factor is 3.6%, this would bring the tax collections to $46.9 million and matched with the federal FMAP of 74.185% would equate to $228.5 million.
In FY 2021, approximately $45.3 million was collected in Managed Care Tax. Once collected, these funds are then matched with federal financial participation (FFP) and provided a total of $240.6 million for the Medicaid program (based on the SFY2021 blended FMAP of 81.178% which included pandemic increase).
FFP is the Federal Government's share of a State's expenditures under the Medicaid program. WV’s FMAP (federal medical assistance percentage) which is used to calculate the amount of Federal share of State expenditures for services for SFY2023 is approximately 74.185% based on blended FMAP of FFY2022 and FFY2023. In this fiscal note, the 6.2% additional FMAP, which is tied to continuation of the Public Health Emergency has been assumed to be terminated.
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: Bill J. Crouch
Email Address: dhhrbudgetoffice@wv.gov