FISCAL NOTE
Date Requested: January 20, 2023
Time Requested: 09:18 AM |
| Agency: |
Public Employees Insurance Agency (PEIA) |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2775 |
Introduced |
HB2785 |
|
|---|
| CBD Subject: |
Insurance |
|---|
|
FUND(S):
PEIA Basic Insurance Fund
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 reimburse individuals for healthcare costs at a facility that no longer accepts PEIA. The proposed bill states, individuals enrolled in a PEIA plan who have outstanding medical bills for treatment at a healthcare facility who no longer accepts PEIA, but who previously accepted PEIA, shall have the full amount of their medical bills reimbursed to them. PEIA is mandated by the proposed bill to reimburse individuals within 7 after the participant submits their medical bills to PEIA’s office.
If passed, the proposed bill directly undermines PEIA’s ability to negotiate discounts with West Virginia providers. This would limit PEIA in a way that no other insurer is limited within the State. All West Virginia providers would be permitted to withdraw from accepting PEIA insurance to instead pursue collecting fully billed charges from participants.
PEIA was billed $2 billion dollars in gross charges for medical services in fiscal year 2022. Negotiated discounts reduce those charges to $552 million allowed. Thus, the potential costs that PEIA could incur from losing discounts is $1.5 billion dollars in annual claims expense. Of the $552 million allowable charges from WV providers, PEIA paid $380 million; the difference between allowed versus paid being the members share plus any denials or claims reversals. The proposed bill can be interpreted that PEIA participants are no longer required to pay any share of billed charges if utilizing care with a provider that no longer accepts PEIA.
The West Virginia State Treasurer’s Office (WVSTO) requires claims payments to be processed using the State’s check writing services instead of PEIA’s third party administrator. Accordingly, the State only processes check payments once a week, and therefore PEIA cannot comply with the administrative requirement in the proposed bill to reimburse the full amount of medical bills to participants within seven days. PEIA has not reached out to the State officials to ascertain the fiscal impact of printing checks daily or the implications of terminating the service.
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 |
1,400,000,000 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
1,400,000,000 |
| 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):
Memorandum
Person submitting Fiscal Note: April Taylor
Email Address: april.a.taylor@wv.gov