This Fiscal Note is not an official copy and should not be quoted or cited.
Fiscal Note - SB 0921 - Formation of Health Care Provider Joint Ventures
L.R. NO. 3493-01
BILL NO. SB 921
SUBJECT: Attorney General; Health; Health Professionals; Contracts
TYPE: Original
DATE: March 22, 1996
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED FY 1997 FY 1998 FY 1999
General Revenue ($116,152) ($103,743) ($33,809)
Conservation ($25,000) ($30,900) ($31,827)
Total Estimated
Net Effect on All
State Funds ($141,152) ($134,643) ($65,636)
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 Economic Development (DED) - Division of
Professional Registration (DPR), the Department of Insurance (INS), the
Department of Highways and Transportation (DHT), the Department of Social
Services (SOS), and the Missouri Consolidated Health Care Plan (MCHCP) assume
this proposal would not fiscally impact their agencies.
Department of Conservation (MDC) officials state the proposal would not
appear to impact insurance claim payout but would likely represent additional
administration responsibilities for the insurer. MDC estimates an increase
of one percent in premiums is anticipated representing approximately a
$30,000 annual fiscal impact on the MDC funds.
Officials from the Department of Health (DOH) state the proposal does not
include a specific reference to a fee being required with the submission of
an application. DOH based their calculation of the fee on the assumption
that it could either be referenced in the rules or reliant on the current fee
language which is based on the amount of the capital expenditure. DOH's
assumption for determining fee amount is based on 0.1% (current fee language)
of the annual operating budget of the joint venture. DOH states that if the
annual operating budget is $10,000,000, the application fee would be $10,000.
DOH projects that in the first year approximately seven applications would be
filed resulting in revenues of $70,000. DOH further states the increase in
revenue for the two following years was based on twice the number of
applications for each year.
DOH used the annual operating budget for determining the fee amount because
the applications described in this proposal are very different from the
ones DOH currently reviews. DOH states the review of the applications
addressed in this proposal would be based on the establishment of joint
ventures between health care providers.
Officials from DOH assume an additional six FTE, plus related expense and
equipment, would be required to implement the duties outlined in this
proposal. One Attorney ($35,000) would serve as the Certificate of Need's
(CON) legal counsel due to the clear distinction of decision-making in this
proposal that would be required by the CON and the Office of Attorney General
for applications. Three Health Planning Specialists ($28,200) would review
new applications, develop and update the criteria and standards, and monitor
compliance of approved applications. One Clerk Typist II ($16,164) would
provide clerical support to the Health Planning Specialists.
One Clerk Typist III ($18,036) would provide clerical support the Attorney
and supervise the Clerk Typist II as well as the two existing clerical.
Expenses would include rental space for six FTE and communication and travel
expenses ($58,400). Equipment would include office furniture and personal
computer for six FTE ($26,404). DOH assumes the revenues and expenses would
be accounted for within General Revenue Fund.
Oversight assumes for purposes of this fiscal note one Health Planning
Specialist ($28,200) would be needed in FY97 for the development of the
criteria and standards and one additional Health Planning Specialist
($28,200) would be needed in FY98 to review applications and monitor the
approved applications. Oversight assumes the Attorney ($35,000) would be
needed in FY97 to provide legal counsel to the CON and assist in the
development of the criteria and standards and reviews of applications in
FY98. One Clerk Typist III ($18,036) would be need in FY97 to provide
clerical support and supervise existing clerical. Oversight assumes that
$3,000 for travel expenses would be incurred for the three professional
positions, no additional rental space would be needed, and communication
expenses would be $2,400 per FTE. Oversight assumes that no typewriters
would be needed as personal computers would be used. Oversight further
assumes the first applications would not be received until FY98 ($70,000) and
doubled in FY99 ($140,000).
Officials from the Office of Attorney General (AGO) assume that this proposal
would represent a new program to the AGO. AGO assumes an additional three
FTE, plus related expense and equipment, would be required to implement the
additional duties outlined in this proposal. Two Assistant Attorney General
I's ($30,000) would be required to provide legal representation pursuant to
Section 354.794, RSMo. One Legal Secretary ($17,500) would provide clerical
support to the two Assistant Attorney General I's. Expenses would include
communication expenses, office expenses, and travel expenses for three FTE
($36,150). Equipment would include office furniture and personal computers
for three FTE ($20,100).
Oversight assumes that no personal service, fringe benefits, and expense and
equipment would be required as current resources would be reallocated to
fulfill the duties of this proposal. Oversight assumes that because the AGO
would become part of the application, approval, and monitoring process, the
AGO would no longer represent the CON in other legal matters.
FISCAL IMPACT - State Government FY 1997 FY 1998 FY 1999
(10 Mo.)
GENERAL REVENUE FUND
Income - Department of Health
Application fees $0 $70,000 $140,000
Costs - Department of Health
Personal services ( 4 FTE) ($69,362) ($114,977) ($117,850)
Fringe benefits ($21,322) ($35,344) ($36,227)
Expense and equipment ($25,468) ($23,422) ($19,732)
Total Costs - Department of Health ($116,152) ($173,743) ($173,809)
ESTIMATED NET EFFECT ON
GENERAL REVENUE FUND ($116,152) ($103,743) ($33,809)
CONSERVATION FUND
Costs - Department of Conservation
Increase in premium contributions ($25,000) ($30,900) ($31,827)
ESTIMATED NET EFFECT ON
CONSERVATION FUND ($25,000) ($30,900) ($31,827)
FISCAL IMPACT - Local Government FY 1997 FY 1998 FY 1999
(10 Mo.)
$0 $0 $0
DESCRIPTION
This proposal would authorize the Attorney General and the Missouri Health
Facilities Review Committee to approve the formation of a health care
provider joint venture if the venture meets the following criteria: The joint
venture must be a nonexclusive network in which the participating members are
permitted to create or join other competing networks, limited in size to
fifty percent of the health care provider profession comprising the network
in the relevant geographic market and fifty percent of the specialist members
in the network, with no less than two members of any specialty permitted to
participate. Members of the joint venture must engage in risk sharing, and
those participating in the venture are granted immunity from liability under
the federal antitrust laws or the antitrust laws of this state.
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 Health
Department of Social Services
Department of Economic Development
Division of Professional Registration
Department of Insurance
Department of Highways and Transportation
Department of Conservation
Office of Attorney General
Missouri Consolidated Health Care Plan