SB 0751 - Fiscal Note

Fiscal Note - SB 0751 - Ways DMH Vendors May Make Reimbursements of Overpayments

L.R. NO.  2941-01
BILL NO.  SB 751
SUBJECT:  Mental Health:  Medical Procedures and Personnel
TYPE:     Original
DATE:     January 24, 1996



                              FISCAL SUMMARY


                    ESTIMATED NET EFFECT ON STATE FUNDS

FUND AFFECTED                 FY 1997         FY 1998        FY 1999

General Revenue              ($3,167)        ($3,800)       ($3,800)


Total Estimated
Net Effect on All
State Funds                  ($3,167)        ($3,800)       ($3,800)


                   ESTIMATED NET EFFECT ON FEDERAL FUNDS

FUND AFFECTED                 FY 1997         FY 1998        FY 1999

None


Total Estimated
Net Effect on All
Federal Funds                      $0              $0             $0


                    ESTIMATED NET EFFECT ON LOCAL FUNDS

FUND AFFECTED                 FY 1997         FY 1998        FY 1999

Local Government                   $0              $0             $0



                              FISCAL ANALYSIS

ASSUMPTION

Officials from the Department of Revenue and the Office of Attorney General
assume this proposal would not fiscally impact their agencies.

Department of Mental Health (DMH) officials state that this proposal would
change the interest rate charged on overpayments from 18% annum to a rate not
to exceed prime plus 5%.  DMH assumes this would allow DMH to adjust the
interest rate to more accurately reflect current market interest rates.  The
prime rate is defined in Section 32.065, RSMo, and is determined by the
Department of Revenue annually.  This rate, by statute, cannot be below 12%
per annum.  Therefore, DMH assumes that this would be the lowest rate DMH may
charge.  DMH states the estimated reduction interest charged and deposited to
General Revenue, at the most, would not exceed the difference between 18% and
12%.  Based on prior years experience, DMH estimates the reduction to be
$3,800 annually.


FISCAL IMPACT - State Government     FY 1997     FY 1998     FY 1999
                                    (10 Mo.)

GENERAL REVENUE FUND

Loss - Department of Mental Health
    Reduction in interest charges   ($3,167)    ($3,800)    ($3,800)

ESTIMATED NET EFFECT ON
GENERAL REVENUE FUND                ($3,167)    ($3,800)    ($3,800)



FISCAL IMPACT  - Local Government    FY 1997     FY 1998     FY 1999
                                    (10 Mo.)

                                          $0          $0          $0


DESCRIPTION

This proposal would change the "overpayment" procedure currently being used
by the Department of Mental Health (DMH).  Under this proposal, DMH would
notify a vendor of an overpayment and request reimbursement.  A vendor would
be allowed to request a review of the overpayment and reimbursement request
within 15 days of receipt of such notice.  If the overpayment is not fully
repaid within 45 days of the date of the notice, DMH would be allowed to
charge interest on the unpaid balance beginning from the date of the notice
of overpayment.  DMH would be allowed to establish a repayment plan with the
vendor to recover the overpayment plus accrued interest over a period not to
exceed 12 months.  If any portion of an overpayment plus accrued interest is
not repaid pursuant to this proposal, DMH may certify all or a portion of the
amount due to the Department of Revenue, the Office of the Attorney General
or take other appropriate action to collect the overpayment.  If any
overpayment plus interest, not subject to a repayment plan, is not fully
repaid within 6 months from the date of the notice of overpayment, DMH may
certify the amount due to the Department of Revenue, the Office of the
Attorney General or take other appropriate action to collect the overpayment.

This legislation is not federally mandated, would not duplicate any other
program and would not require additional capital improvements or rental
space.

SOURCES OF INFORMATION

Department of Mental Health
Department of Revenue
Office of Attorney General