Fiscal Note - SB 0109 - Antitrust Exemption For Health Care Provider Joint Ventures
L.R. NO. 0192-03
BILL NO. SB 109
SUBJECT: Attorney General, State, Heath Care, Health Care Professionals,
Physicians
TYPE: Original
DATE: January 7, 1997
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
General Revenue ($113,847) ($103,276) ($33,264)
Total Estimated
Net Effect on All
State Funds ($113,847) ($103,276) ($33,264)
ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
None
Total Estimated
Net Effect on All
Federal Funds $0 $0 $0
ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
Local Government $0 $0 $0
FISCAL ANALYSIS
ASSUMPTION
Officials from the Department of Economic Development - Division of
Professional Registration, the Department of Insurance, the Department of
Transportation, the Department of Conservation, and the Missouri Consolidated
Health Care Plan assume this proposal would not fiscally impact their
agencies.
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 ($28,764) would review
new applications, develop and update the criteria and standards, and monitor
compliance of approved applications. One Clerk Typist II ($16,488) would
provide clerical support to the Health Planning Specialists. One Clerk
Typist III ($18,396) 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
($48,647). Equipment would include office furniture and personal computer
for six FTE ($26,698). 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 ($28,764) would be needed in FY98 for the development of the
criteria and standards and one additional Health Planning Specialist
($28,764) would be needed in FY99 to review applications and monitor the
approved applications. Oversight assumes the Attorney ($35,000) would be
needed in FY98 to provide legal counsel to the CON and assist in the
development of the criteria and standards and reviews of applications in
FY99. One Clerk Typist III ($18,396) would be need in FY98 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 FY99 ($70,000) and
doubled in FY2000 ($140,000).
The Department of Social Services (DOS) did not respond to our fiscal impact
request. ct. However, in responding to a similar proposal last year DOS
assumed their would be no fiscal impact.
Officials from the Office of Attorney General (AGO) did respond to our fiscal
impact request. However, in responding to a similar proposal last year the
AGO assumed that the proposal would represent a new program to the AGO. AGO
assumed an additional three FTE, plus related expense and equipment, would be
required to implement the additional duties outlined in the 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 1998 FY 1999 FY 2000
(10 Mo.)
GENERAL REVENUE FUND
Income - Department of Health
Application fees $0 $70,000 $140,000
Costs - Department of Health
Personal services ( 4 FTE) ($70,160) ($116,539) ($119,452)
Fringe benefits ($20,017) ($33,249) ($34,080)
Expense and equipment ($23,670) ($23,488) ($19,732)
Total Costs - Department of Health ($113,847) ($173,276) ($173,264)
ESTIMATED NET EFFECT ON
GENERAL REVENUE FUND ($113,847) ($103,276) ($33,264)
FISCAL IMPACT - Local Government FY 1998 FY 1999 FY 2000
(10 Mo.)
$0 $0 $0
FISCAL IMPACT - Small Business
No direct fiscal impact to small businesses would be expected as a result of
this proposal.
DESCRIPTION
This proposal would exempt health care provider joint ventures from the
antitrust laws of this state. Joint ventures are agreements between two or
more health care providers that join together to provide health care services
to a defined population. Such agreements would involve substantial financial
or operational integration, including risk sharing. The joint ventures would
apply to the Health Facilities Review Committee for the exemption. The
application would be reviewed by both the Committee and the Attorney General.
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 Economic Development
Division of Professional Registration
Department of Insurance
Department of Transportation
Missouri Consolidated Health Care Plan
Department of Conservation
NOT RESPONDING: Department of Social Services and the Office of Attorney
General
This Fiscal Note is not an official copy and should not be quoted or cited.