FISCAL NOTE
Date Requested: January 14, 2023
Time Requested: 03:27 PM |
| Agency: |
Division of Regulatory and Fiscal Affairs, WV |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2279 |
Introduced |
HB2006 |
|
|---|
| CBD Subject: |
Human Services |
|---|
|
FUND(S):
General Revenue
Sources of Revenue:
General Fund
Legislation creates:
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
Note: This Fiscal Note applies to the Strike and Insert Amendment proposed by the House Health and Human Resources Committee.
House Bill 2006 would split the West Virginia Department of Health and Human Resources (DHHR) into three separate departments: the Department of Health, the Department of Human Services, and the Department of Health Care Facilities. The Office of the Chief Operating Officer (COO) would continue and provide administrative support to the three newly created departments. Further, under HB 2006 the COO is required to implement a plan regarding administrative services with the stated goal of streamlining services and reducing overall costs.
The Division of Regulatory and Fiscal Affairs (RAFA) estimates no net fiscal cost from HB 2006. There would be a cost of approximately $479,500 per fiscal year for one new secretary position, the conversion of the Chief Operating Officer of the Office of Health Facilities to a secretary position, and an executive assistant for each, but this is required to be offset from the elimination of existing vacant administrative positions within DHHR. As a result, the net effect of this change would be zero.
Notably, this analysis assumes that the total current responsibilities of DHHR are split between the three new departments and the COO without addition and that no cost savings are realized from the COO’s administrative efficiency plan. Should cost savings be realized because of the administrative efficiency plan, HB 2006 could provide an overall cost reduction to the state.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2023
Increase/Decrease
(use"-") |
2024
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 |
0 |
0 |
Explanation of above estimates (including long-range effect):
House Bill 2006 would split the West Virginia Department of Health and Human Resources into three separate departments: the Department of Health, the Department of Human Services, and the Department of Health Care Facilities. The Office of the Chief Operating Officer would continue and provide administrative support to the three newly created departments. Further, the COO would be required to implement a plan regarding administrative services with the stated goal of streamlining services and reducing overall costs.
There are two potential sources of costs from HB 2006. The first is the need for additional personnel resulting from the restructuring of the department. The second is whether HB 2006 expands the collective role and responsibilities of DHHR when divided into separate departments.
On the first point, RAFA has identified the need for two additional cabinet secretary positions and has also assigned an assistant to each secretary. Additional deputy secretaries should not be necessary as DHHR currently employs three deputy secretaries. Assuming a $150,000 salary for each secretary, a $75,000 salary for each assistant, a current salary of $100,000 for the COO of the Office of Health Facilities, and a 37 percent factor for benefits, that generates a per fiscal year cost of $479,500. However, the bill requires that any additional administrative positions, including these, must be budgeted through the collapse of existing vacant administrative positions. As a result, there would be no net fiscal cost to the state.
The second question is whether HB 2006 adds any additional roles or responsibilities that may require additional staffing or other resources to complete. RAFA requested that the Joint Committee’s Legislative Services review the bill, and the following items were noted as potential areas of increased cost:
The delineation of responsibilities for the Office of the Chief Operating Officer (§9-2-14). It is RAFA’s understanding that the current COO provides administrative support for DHHR and this function would continue for all three departments under HB 2006. The creation of the plan to streamline administrative services may require the addition of several staff members, which would require the collapse of existing vacant administrative positions but could prove to be a cost-savings measure for the state if successful. However, that is indeterminate without knowing in advance what measures the COO will implement and their level of effectiveness.
The creation of a state public health system by the Department of Health (§16-1-4). The provisions of the section require the Department of Health to “establish a state public health system.” RAFA’s interpretation is that these responsibilities would be currently borne by the Bureau for Public Health within DHHR and would not generate additional cost to the state.
The Office of the Inspector General (OIG) has new code providing its responsibilities (§16-1-22). The responsibilities of OIG include investigations, inspections, quality control, and coordination with the Medicaid Fraud Control Unit and other departmental programs and state and federal agencies. RAFA’s interpretation is that the existing OIG, which is continued under HB 2006, currently performs these duties through the Investigations and Fraud Management unit, the Office of Health Facility Licensure and Certification, Quality Control, and OIG’s other units. Thus, these provisions appear to delineate existing responsibilities and generate no additional cost to the state.
Finally, each new department is required to coordinate efforts with the other two departments and coordinate administrative personnel with the COO. RAFA’s interpretation is that these responsibilities would be shared by the secretary, deputy secretary, and executive assistant within each department at no additional cost to the state.
Memorandum
This Fiscal Note relies on the assumptions made within regarding the additional personnel to implement the provisions of House Bill 2006. Fiscal costs could be incurred, but only if the expansion of administrative positions is so great that the collapse of all existing vacant administrative positions would be insufficient to cover the additions.
Additional cost savings could be realized should the Office of the Chief Operating Officer implement an administrative plan that streamlines administrative services, reduces the provision of duplicative services, and/or raises the efficiency of existing services. Depending on the extent to which such savings are generated, HB 2006 could provide an overall cost reduction to the state.
Person submitting Fiscal Note: Peter Shirley
Email Address: peter.shirley@wvlegislature.gov