COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. No.:         3834-05

Bill No.:          SCS for HCS for HB 1516

Subject:           Disabilities; Elderly; Health Care; Department of Social Services

Type:              Original

Date:               May 5, 2008

Bill Summary:            This legislation provides protections for senior citizens, disabled persons, and children and transfers the Division of Aging to the Department of Health and Senior Services.

This legislation allows the Department of Health and Senior Services to establish a schedule of fees for architectural plan reviews of construction documents for certain health facilities.

This legislation amends various sections regarding infection control procedures.

This legislation modifies the requirements for sprinkler systems in long-term care facilities.

This legislation allows for nursing home transition grants for long-term care residents receiving MO HealthNet.

This legislation modifies the requirements for the handling of reports of child abuse and neglect.

This legislation requires the state to make reasonable efforts to locate the grandparents of a child for emergency placement of the child and requires the grandparents to be given first preference as foster parents.

Numbers within parentheses: ( ) indicate costs or losses.

This fiscal note contains 18 pages.

FISCAL SUMMARY

* Unknown savings and losses would net to $0.

*Income and costs of Unknown but Greater than $663,970 in FY09, Unknown but Greater than $692,638 in FY10 and Unknown but Greater than $716,638 in FY11 would net to $0.

☒ Estimated Total Net Effect on All funds expected to exceed $100,000 savings or (cost).

☒ Estimated Net Effect on General Revenue Fund expected to exceed $100,000 (cost).

                                                            FISCAL ANALYSIS

ASSUMPTION

Officials from the Office of Administration, Office of the State Courts Administrator, Office of Prosecution Services and the Department of Labor and Industrial Relations each assume the proposal would have no fiscal impact on their respective agencies.

In response to a previous version of this proposal, officials from the Department of Public Safety assume the proposal would have no fiscal impact on their agency.

Officials from the Office of the Attorney General assume any potential costs arising from this proposal can be absorbed with existing resources.

Officials from the Office of the Secretary of State (SOS) state many bills considered by the General Assembly include provisions allowing or requiring agencies to submit rules and regulations to implement the act. The SOS is provided with core funding to handle a certain amount of normal activity resulting from each year’s legislative session. The fiscal impact for this fiscal note to the SOS for Administrative Rules is less than $2,500. The SOS recognizes that this is a small amount and does not expect that additional funding would be required to meet these costs. However, the SOS also recognizes that many such bills may be passed by the General Assembly in a given year and that collectively the costs may be in excess of what the office can sustain with the core budget. Therefore, the SOS reserves the right to request funding for the cost of supporting administrative rules requirements should the need arise based on a review of the finally approved bills signed by the governor.

Oversight assumes the SOS could absorb the costs of printing and distributing regulations related to this proposal. If multiple bills pass which require the printing and distribution of regulations at substantial costs, the SOS could request funding through the appropriation process. Any decisions to raise fees to defray costs would likely be made in subsequent fiscal years.

Officials from the Department of Mental Health (DMH) state the DMH and its service providers are currently required to perform background checks of prospective employees, including sex offenders. There should be no fiscal impact resulting from this proposal.

In response to a previous version of this proposal, officials from the Office of the State Public Defender (SPD) state for purposes of the proposal, the SPD cannot assume existing staff will provide competent, effective representation for any new cases arising where indigent persons are charged with the proposed new crimes

ASSUMPTION (continued)

While the number of new cases may be too few or uncertain to request additional funding for this specific proposal, the SPD will continue to request sufficient appropriations to provide competent and effective representation in all of the SPD cases.

Oversight assumes the SPD could absorb the additional caseload that may result from this proposal within existing resources. Oversight assumes any significant increase in the workload of the SPD would be reflected in future budget request.

Officials from the Department of Health and Senior Services states the following:

Section 197.101: The DHSS conducted 205 facility architectural plan reviews in Fiscal Year 2007. The Department estimates the annual number of architectural plan reviews will remain stable over the next several years.

Based on an average estimated fee of $2,300 per plan review, the Department expects General Revenue fee collections of approximately $475,000 annually ($2,300 per review x 205 plan reviews = $471,500).

Due to the time required to promulgate the necessary rules, the revenue estimate for FY 2009 is included as one-half of the estimated annual revenue or $237,500 ($475,000 X .5 = $237,500).

Since the Department has the ability to reduce or waive fees, the Department is including a range of fee revenue for each year: $0 to $237,500 for FY 2009, and $0 to $475,000 for FY 2010 and 2011.

If the legislation passes, a formal fee schedule will be developed and the necessary rules promulgated.

Section 197.150.2: Hospitals are already required to have an infection control program that is reviewed by Division staff during surveys/inspections. The additional MRSA specific requirements included in this Section would be reviewed at the same time as the existing infection control program requirements. The additional time that would be required is believed to be minimal. The fiscal impact for this section is considered to be zero.

Sections 197.074 and 197.075: The Department of Health and Senior Services' fiscal note response to SS SCS HCS HB 952 & 674 (FN 2306-11T) passed during the 2007 legislative session indicated an unknown, greater than $100,000, impact for the General Revenue Fund, and an unknown impact for the Fire Safety Standard Loan Fund.

ASSUMPTION (continued)

The language added by this bill to section 198.074.6. "All facilities described in subsections 3, 4, and 5 of this section shall be eligible for the loan." would result in additional facilities (intermediate care facilities and skilled nursing facilities) being eligible to apply for a loan from the Fire Safety Standard Loan Fund.

With the potential for additional loan applications to process, loan tracking, monitoring of repayments, etc., there would also be an increase in General Revenue needed for administrative purposes. DHSS assumes with the additional facilities eligible for the loan and the increase in administrative work as a result of this increase, this fiscal note would result in an unknown cost, greater than $100,000 to the Department.

Officials from the Department of Corrections (DOC) state the proposal includes penalty provision up through a class B felony. The fiscal impact for DOC per year is unknown, less than $100,000.

Officials from the Department of Elementary and Secondary Education (DESE) assume there is no state cost to the foundation formula associated with this proposal. Should the new crimes and amendments to current law result in additional fines or penalties, DESE cannot know how much additional money might be collected by local governments or the DOR to distribute to schools. To the extent fine revenues exceed 2004-2005 collections, any increase in this money distributed to schools increases the deduction in the foundation formula the following year. Therefore the affected districts will see an equal decrease in the amount of funding received through the formula the following year; unless the affected districts are hold-harmless, in which case the districts will not see a decrease in the amount of funding received through the formula (any increase in fine money distributed to the hold-harmless districts will simply be additional money). An increase in the deduction (all other factors remaining constant) reduces the cost to the state of funding the formula.

Officials from the Missouri State Highway Patrol state the following: 

According to the Department of Health and Senior Services, the estimated number of persons that are currently employed and will be subject to this new legislation is approximately 228,000. Approximately 100,000 of these 228,000 employees have had background checks performed pursuant to other statutory requirements and will not be part of the initial check process stipulated in this proposed legislation (228,000 - 100,000 = 128,000).

Additionally, it is assumed there will be a 10% turnover rate for these healthcare workers; therefore, 22,800 additional background checks will be needed annually. Each background check costs $20.00 for the state fingerprint check and an additional $19.25 for the nationwide federal check. Of which, the state pays the FBI $17.25.

ASSUMPTION (continued)

Estimated Revenue for FY09:

128,000 healthcare workers x $39.25 (state/federal background check)        $ 5,024,000

19,000 (22,800/12 x 10 months) healthcare workers x $39.25                       $ 745,750

FY09 Revenue Total:                                                                                     $ 5,769,750

Estimated Expense for FY09:

128,000 healthcare workers x $17.25 (federal background check charge)     $ 2,208,000

19,000 (22,800/12 x 10 months) healthcare workers x $17.25                       $ 327,750

FY09 Expense Total:                                                                                      $ 2,535,750

Estimated Revenue for FY10 & FY11:

22,800 employees x $39.25 $ 894,900

Estimated Expense for FY10 & FY11:

22,800 employees x 17.25 $ 393,300 

Officials from the Department of Social Services (DSS) states the proposal updates and re-numbers various statutory sections to accommodate the transfer of the Division of Aging from the DSS to the Department of Health and Senior Services that took place several years ago. It also strengthens protection for the elderly. Among its provisions are:

•          It adds financial exploitation of the elderly to the definition of elder abuse and neglect.

•          All powers, duties, and functions of the Board of Nursing Home Administrators are transferred to the Department of Health and Senior Services.

•          It makes personal care assistants mandated reporters, who must report the failure of in-home service providers to deliver services; the falsification of documents verifying service delivery; and the misappropriation of property of money.

•          Any potential consumer, in-home services client, or patient whose services are funded by MO HealthNet must be screened to ascertain if they are included on the Missouri sexual offender registry maintained by the Missouri State Highway Patrol.

•          Reports of elder abuse are confidential with certain exceptions. The bill allows DHSS to release names to DSS for the purpose of licensure under Chapter 210 (Child Protection); i.e., foster and adoptive parents.

There is no fiscal impact to the Department of Social Services for this part of the proposal. The Department of Health and Senior Services has primary responsibility for the elderly and those programs covered by this legislation.

However, the SCS adds 11 sections to the proposal, some of which affect the DSS.

ASSUMPTION (continued)

Sections 192.667 and 197.150 – Hospital Infection Control Program:

Hospitals are required to develop an MRSA (methicillin-resistant staphylococcus aureus) control program by January 1, 2009. It allows hospitals to isolate MRSA infected patients or use alternative methods to reduce the risk of MRSA transmission when private rooms are not available.

The fiscal impact for this part of the proposal is zero. MHD assumes that hospitals are already implementing these procedures as part of their infection control program and would not incur additional costs that would be passed to the Division.

Section 197.101: DHSS can establish fees for architectural plan review of nursing home and hospital construction. This provision has no fiscal impact to DSS.

Sections 198.074 and 198.075 – Sprinklers in Long Term Care Facilities:

This part of the proposal revises requirements for installing and maintaining sprinkler systems in long term care facilities. There is no fiscal impact to the DSS for this part of the legislation.

Section 208.152 – Comprehensive Day Rehabilitation Services:

Comprehensive day rehabilitation is added to the list of covered services for all eligible adults under the MO HealthNet program. Currently this service is provided only to children and to adults only in the following programs: assistance for the blind, pregnant women, and nursing home care. The services must be based on an individualized, goal-oriented, comprehensive and coordinated treatment plan. The MO HealthNet Division shall establish the definition and criteria for designation of a comprehensive day rehabilitation service facility, the benefit limitations and the payment mechanism utilizing the expertise of brain injury rehabilitation service providers and the Missouri Head Injury Advisory Council. The services must be provided in a community based facility and be authorized on tier levels based on the services the patient requires and the frequency of the services as guided by a qualified rehabilitation professional associated with a health care home.

The cost to MHD for this part of the proposal is:

                        FY 09                                     FY 10                                     FY 11

GR:     (Unknown > $229,490)          (Unknown > $241,620)          (Unknown > $252,493)

Fed:    (Unknown > $393,954)          (Unknown > $414,779)          (Unknown > $433,444)

Total:  (Unknown > $623,444)          (Unknown > $656,399)          (Unknown > $685,937)

ASSUMPTION (continued)

The cost for expanding this program includes the fee for service program costs (which were projected based on the FY05 cost of $526,728 and a 4.5% inflation factor applied to FY06 through FY11), the managed care actuary cost, and an unknown cost for an increase in capitation rates (the estimate is unknown but greater than $100,000).

Section 208.819 – Increases and Renames the Missouri Transition to Independence Grant:

This legislation changes the laws regarding the assistance provided to nursing home residents who are transitioning back into their communities. Subject to appropriations, MO HealthNet eligible nursing home residents can receive a one-time transition grant up to $2,400 (up from $900). The grants are administered by the Division of Senior and Disability Services within the Department of Health and Senior Services. There is no fiscal impact to the DSS for this part of the proposal.

Sections 210.150 and 210.152 – Child Abuse and Neglect Records:

This section allows investigation reports of child abuse or neglect in the Central Registry of the Children's Division within the DSS, to be released to an alleged perpetrator with pending criminal charges arising out of the facts named in the investigation record prior to an indictment or filed information.

The proposal reduces from 60 to 30 days from the receipt of the notice from the Division of its findings that the alleged perpetrator has to seek a reversal and a review by the Child Abuse and Neglect Review Board. The amount of time that an alleged perpetrator who is aggrieved by a review board's decision has to request a judicial review is also reduced from 60 to 30 days.

The Children's Division does not anticipate any fiscal impact from this part of the proposal, since it only changes the timeframe when a child abuse/neglect review can occur for alleged perpetrators with criminal charges.

Sections 210.305 and 210.565 – Grandparent Placements:

Requires the Children's Division to make reasonable efforts to place children with grandparents. Specifically, CD must try to locate a grandparent within three hours before placing a child in a foster home and continue to do so for 24 hours after a child is placed in a foster home.

The cost to CD is:

            FY 09             FY 10             FY 11

GR:     Unknown > ($450,481)          Unknown > ($471,259)          Unknown > ($485,397)

Fed:    Unknown > ($170,016)          Unknown > ($177,858)          Unknown > ($183,194)

ASSUMPTION (continued)

DSS will require additional staff to work a minimum of three hours to locate a placement with a grandparent.

In Fiscal Year 2006, the Children’s Division had 6,130 children enter into care. This legislation would require at least three (3) additional hours per placement to attempt to locate a grandparent.

This calculates to: 6,130 children X 3 hours = 18,390 additional staff hours.

18,390 ÷ 2080 (number of full-time annual hours) = 8.84 or 9 additional Children Service workers. Additionally, 1 Children's Services Supervisor (7 Children Service Workers to 1 Supervisor ratio) and 2 Senior Office Support Staff (6 Professional Staff to 1 Office Support staff ratio) would be required. This is a total of 12 additional staff.

If a grandparent were unable to be located within those three (3) hours, the fiscal impact would be much greater. Therefore, the Children's Division is submitting a cost of unknown greater than $620,498 for FY 2009.

Oversight notes that states can earn the federal medical assistance percentage (FMAP) on Medicaid program expenditures. The Social Security Act requires the Secretary of Health and Human Services to calculate and publish the actual FMAP each year. The FMAP is calculated using economic indicators from state and the nation as a whole. Missouri’s FMAP for FY09 is a 63.19% federal match. The state matching requirement is 36.81%.

Oversight notes that states can earn the federal medical assistance percentage (FMAP) on Medicaid program expenditures. The FMAP used in the DSS-CD response is a 73/27 split between General Revenue Funds and Federal Funds.