EXECUTIVE AGENCY FISCAL NOTE
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1 Items of Revenue or Expense, or Both EXECUTIVE AGENCY BDR SB 382 FISCAL NOTE AGENCY'S ESTIMATES Date Prepared: April 3, 2009 Agency Submitting: Health Care Financing and Policy, Health and Human Services Effect on Future Biennia BA 3157 IGT (Expense) $23,148,000 $23,285,000 $46,433,000 Total 0 $23,148,000 $23,285,000 $46,433,000 Explanation (Use Additional Sheets of Attachments, if required) This bill had currently been under review by the Division of Health Care Financing and Policy, which was working cooperatively with both County officials and hospital administrators to craft a new agreement that meets the needs of all parties concerned. Because the new methodology delineated in the bill had not been completed, it was impossible to estimate what the fiscal impact would be as a result of changes to the current legislation. However, on April 1, 2009, Clark County representatives made it known that they believed the DSH payment distribution methodology provided for in the bill would reduce payments to UMC from approximately $78M to $33M (based on 2009 estimates). This would result in one of two scenarios taking place: The County would terminate their participation in the DSH program, which could lead to a discontinuation of the entire program and the loss of State net benefit from DSH. In this scenario the fiscal impact is as follows (Exhibit 1b): The total general fund impact for the SFY biennium is estimated to be $38,192,528 The total general fund impact for the SFY biennium is estimated to be $38,192,528 In the second scenario, University Medical Center would opt to not participate in the program, while the other hospitals in Clark County, and Renown hospital in Washoe county continue to particpate. In this scenario the fiscal impact is as follows (Exhibit 1 C): The total general fund impact for the SFY biennium is estimated to be $46,433,500 The total general fund impact for the SFY biennium is estimated to be $46,433,500 The fiscal impact entered in the fiscal notes application will be the latter figures representing the worse case scenario in terms of fiscal impact. Name Title George O. Reves ASO III DEPARTMENT OF ADMNISTRATION'S COMMENTS Date Friday, April 03, 2009 The agency's response and information related to DSH appears reasonable. Name Title Andrew K. Clinger Director FN 6081
2 DESCRIPTION OF FISCAL EFFECT BDR SB 382 EXPLANATION This bill revises provisions relating to the disproportionate share payments made to certain hospitals; establishing provisions relating to audits of and prescribing other requirements for certain hospitals; and providing other matters properly relating thereto. This bill had currently been under review by the Division of Health Care Financing and Policy, which was working cooperatively with both County officials and hospital administrators to craft a new agreement that meets the needs of all parties concerned. Because the new methodology delineated in the bill had not been completed, it was impossible to estimate what the fiscal impact would be as a result of changes to the current legislation. However, on April 1, 2009, Clark County representatives made it known that they believed the DSH payment distribution methodology provided for in the bill would reduce payments to UMC from approximately $78M to $33M (based on 2009 estimates). This would result in one of two scenarios taking place: The County would terminate their participation in the DSH program, which could lead to a discontinuation of the entire program and the loss of State net benefit from DSH. In this scenario the fiscal impact is as follows (Exhibit 1b): The total general fund impact for the SFY biennium is estimated to be $38,192,528 The total general fund impact for the SFY biennium is estimated to be $38,192,528 In the second scenario, University Medical Center would opt to not participate in the program, while the other hospitals in Clark County, and Renown hospital in Washoe county continue to particpate. In this scenario the fiscal impact is as follows (Exhibit 1 C): The total general fund impact for the SFY biennium is estimated to be $46,433,500 The total general fund impact for the SFY biennium is estimated to be $46,433,500 BDR , SB 382 EXHIBIT 1A-EXPLANATION
3 DESCRIPTION OF FISCAL EFFECT BDR SB 382 IGT SUMMARY SCENARIO BA CAT DESCRIPTION OF ITEM Total General Fund Federal Total General Fund Federal Total General Fund Federal Total General Fund Federal DHCFP ADMINISTRATION EXPENDITURES Receipts from Local Government 19,042,453 19,042,453 19,150,075 19,150,075 19,150,075 19,150,075 19,150,075 19,150,075 TOTAL DHCFP AMINISTRATION 19,042,453 19,042,453 19,150,075 19,150,075 19,150,075 19,150,075 19,150,075 19,150,075 SCENARIO BA CAT DESCRIPTION OF ITEM Total General Fund Federal Total General Fund Federal Total General Fund Federal Total General Fund Federal DHCFP ADMINISTRATION EXPENDITURES Receipts from Local Government 19,042,453 19,042,453 19,150,075 19,150,075 19,150,075 19,150,075 19,150,075 19,150, Payments to Hospitals 4,105,974 4,105,974 4,134,999 4,134,999 4,134,999 4,134,999 4,134,999 4,134,999 TOTAL DHCFP AMINISTRATION 23,148,427 23,148,427 23,285,074 23,285,074 23,285,074 23,285,074 23,285,074 23,285,074 BDR [#], SB [#] SUMMARY [DATE, HARD CODED]
4 BDR SB 382 DESCRIPTION OF FISCAL EFFECT DSH Scenario 1 DSH Allotment DSH SFY 2009 IGT DSH 2009 DSH SFY 2010 IGT DSH 2010 DSH SFY 2011 IGT DSH 2011 University Medical Center 79,563,211 61,924,527 83,407,537 $ 64,852,195 83,929,975 65,250,061 North Vista 750, , ,007 St Rose Delima 807, , ,992 Renown Regional Medical Center 5,158,700 1,500,000 5,265,487 1,500,000 5,279,999 1,500,000 Humboldt General Hospital 215, , ,109 William Bee Ririe Hospital 204, , ,001 Mt Grant General Hospital 665, , ,473 South Lyon Medical Center 174, , ,417 Carson-Tahoe Hospital 1,000,000 1,000,000 1,000,000 Northeastern Nevada Reg Hospital 500, , ,000 Banner Churchill Community 500, , ,000 Prime Care, DBA Nye Regional 115, , ,000 Desert View 693, , ,999 Total 90,348,012 63,424,527 94,619,485 $ 66,352,195 95,199,972 66,750,061 STATE SHARE of DSH PAYMENTS: 47,309,743 47,599,986 STATE SHARE OF DSH - IGT PAYMENTS 66,352,195 66,750,061 LOSS OF REVENUE TO THE STATE 19,042,453 19,150,075 BIENNIAL TOTAL 38,192,528 In SFY 2010 the State will collect $66,352,195 in IGT payments from various providers. At the same time it is obligated to pay 1/2 the calculated DSH payments to those providers, $47,309,743. At present this represents a surplus of $19,042,453 to the state. If an agreement cannot be reached between the State and hospitals, the DSH program is in jeopardy of being terminated, which would ultimately result in a loss of $19,042,453 in 2010 and $19,150,075 in 2011 to the State. SOURCE: DSH PROJECTION, BDR , SB 382 EXHIBIT 1B-FISCAL SUMMARY (DSH SCENARIO 1)
5 BDR SB 382 DESCRIPTION OF FISCAL EFFECT DSH Scenario 2 DSH Allotment DSH SFY 2009 IGT DSH 2009 DSH SFY 2010 IGT DSH 2010 DSH SFY 2011 IGT DSH 2011 University Medical Center 79,563,211 61,924,527 83,407,537 $ 64,852,195 83,929,975 65,250,061 North Vista 750, , ,007 St Rose Delima 807, , ,992 Renown Regional Medical Center 5,158,700 1,500,000 5,265,487 1,500,000 5,279,999 1,500,000 Humboldt General Hospital 215, , ,109 William Bee Ririe Hospital 204, , ,001 Mt Grant General Hospital 665, , ,473 South Lyon Medical Center 174, , ,417 Carson-Tahoe Hospital 1,000,000 1,000,000 1,000,000 Northeastern Nevada Reg Hospital 500, , ,000 Banner Churchill Community 500, , ,000 Prime Care, DBA Nye Regional 115, , ,000 Desert View 693, , ,999 TOTAL 10,784,801 1,500,000 11,211,948 1,500,000 11,269,997 1,500,000 STATE SHARE of DSH PAYMENTS (2010, 2011): 5,605,974 5,634,999 STATE SHARE OF IGT PAYMENTS (2010, 2011): 1,500,000 1,500,000 NET DSH PAYMENTS 4,105,974 4,134,999 REVENUE LOSS FROM CLARK CO IGT 19,042,453 19,150,075 TOTAL ANNUAL LOSS 23,148,427 23,285,074 BIENNIAL TOTAL 46,433,500 This scenario assumes that University Medical Center does not participate in the DSH prgram. In SFY 2010 the State will collect $1,500,000 in IGT payments from Renown Hospital. At the same time it is obligated to pay 1/2 the calculated DSH payments to other providers, $11,211,948. This results in an annual loss to the state of $4,105,974 in 2010, and $4,134,999 in These losses are in addition to the approximate $19M loss in each state fiscal year through UMC not participating in the program. BDR , SB 382 EXHIBIT 1C-FISCAL SUMMARY (DSH SCENARIO 2)
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