Medical malpractice insurance account.

06LSO-0095.C1

                                                         

FISCAL NOTE

 

This bill contains an appropriation of $682,500 from the GENERAL FUND.

 

[The following describes the expenditure (outlay) of the above appropriation and expected interest return.]

 

Source of expenditure increase: 

Expenditures will occur as loan amounts are distributed to qualified participants in the form of contracts/promissory notes in order for participants to cover the cost of purchasing qualified insurance policies.  These are one-time distributions covering one-time purchases.

 

Assumptions: 

Expenditures depend upon the number of qualified physicians or contracting entities who participate in the program and their loan amounts.  The number of expected participants and their loan amounts is difficult to estimate.  Suppose ten qualified applicants participate in the program at an average amount of $68,000 per participant; the expenditure would then be $680,000 in the form of loans paid via contract/promissory note.  Since the application period would be from April 1, 2006 through March 30, 2007, it is assumed that all non-administrative expenditures would be made by the end of fiscal year 2007.

 

Source of revenue increase: 

Physicians or contracting entities who participate in the program will repay their loans with interest and on a schedule as defined by W.S. 35-1-902 and 903.  Income generated by these loans will be deposited into the General Fund.

 

Assumptions: 

The amount of income from interest depends upon the number of qualified physicians or contracting entities who participate in the program, the amounts of the loans, the interest rate, and the terms of the loans.  The term of loans for participants under W.S. 35-1-902 is five years.  The term of loans for participants under W.S. 35-1-903 is ten years.  The interest rate for calendar year 2006 will be 6.179 percent, according to the State Treasurer's Office.  The number of qualified physicians and contracting entities who may be expected to participate in the program and their requested loan amounts is difficult to estimate. 

 

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If the entire amount of $682,500 is loaned to qualified applicants with a five-year term at the current interest rate, the interest generated over that time would be approximately $113,000, assuming monthly payments.

 

 

NOTICE-AGENCY ESTIMATE OF ADMINISTRATIVE IMPACT REQUESTED

 

This bill has administrative impact that appears to increase (or decrease) duties or responsibilities of one or more state agencies and may impact agency spending or staffing requirements. As introduced, the bill modifies the Department of Health's budget.

The following state agencies will be asked to provide their estimate of the administrative fiscal impact prior to the first committee meeting held to consider the bill:

 

Department of Health

 

Prepared by:   Don Richards, LSO           Phone:  777-7881

(Information provided by Scott Hayes, Department of Health; phone: 777-7293.)