Veterans skilled nursing center.

12LSO-0146.C1

                                                         

FISCAL NOTE

This bill contains an appropriation of $4,703,000 from the OMNIBUS PERM. LAND FUND to the Wyoming Department of Administration and Information (A&I).

 

The appropriation will be expended as necessary up to $4,703,000 for purchasing land, construction, administration of the construction project, site work, landscaping, and furnishing and equipping the proposed skilled nursing center.  This appropriation also may need to be used for the completion of the design of the center.  The appropriation is based on an alternative elder care or green house living facility of two cottages, each with 12 resident rooms.  The estimated breakdown for how the appropriation may be expended includes the following:

 

Land Purchase:                  $  500,000

 

Construction Administration          $   35,000

Site Work                       $  345,000

Architecture and Engineering    $  245,000

Construction – two cottages          $2,830,000

Furnishings and Equipment       $  430,000

Project Contingency             $  318,000

Construction Total              $4,203,000

 

Project Total                   $4,703,000

 

This project may be eligible for federal Veterans Administration (VA) funding assistance where the state may receive up to 65% of construction cost reimbursement (approx. $2,731,950).  This federal financial assistance may not be used to purchase land for the proposed center.  In partnership, the Department of Health, Department of Administration and Information, and the Wyoming Veterans' Commission plan to submit a pre-application for this project to the VA by February 1, 2012.  The full application is due August 1, 2012.  These agencies expect the VA to render its decision to place this project on its priority list of projects for federal FY 2013 by October 1, 2012.  If approved by the VA, these agencies would begin the construction process as quickly as possible thereafter.  The agencies estimate it will take up to a year to complete construction after breaking ground.  

 

A portion of the revenue generated from the center is required to be used to pay back the appropriated funds to the OMNIBUS PERMANENT LAND FUND over eight (8) years or more provided the revenues levels meet the criteria outlined in Section 3(b) of the bill.

 

FY 2013

FY 2014

FY 2015

NON-ADMINISTRATIVE IMPACT

 

 

 

Anticipated Revenue Increase:

 

 

 

SPECIAL REVENUE                  

0

2,144,010

2,144,010

 

 

 

 

Source of Revenue Increase:

Payments received for services rendered by the center to veteran or non-veteran spouse residents.

 

Assumption:

This bill provides that the proposed skilled nursing center use the revenue it generates to go toward paying for the operation of the center.

 

Expected annual revenue is based partly on financial figures from the Wyoming Retirement Center located in Basin, Wyoming, the only currently licensed, state-owned skilled nursing facility.  Detailed assumptions on estimated annual revenue are as follows:

1)  The facility has two (2) cottages with twelve (12) available resident rooms per cottage (24 potential residents);

2)  Estimate 90% consistent capacity (24 x 0.9 = 21.6 or approx. 22 residents);

3)  All residents are Medicaid eligible for daily service cost reimbursement of approximately $172.00 per day; and

4)  All residents are eligible for federal Veterans Administration (VA) State Home Program per diem reimbursement for daily care services of approximately $95.00 per day.

 

Daily cost reimbursement (Medicaid + VA Per Diem) multiplied by the number of residents at 90% capacity (22) multiplied by the number of care days during the year (365 days) equals expected revenue.

 

($172.00 + $95.00) x 22 residents x 365 days = $2,144,010.00 expected revenue

 

Additional factors impacting expected revenue, especially during its first year of operations, include:

1)  Based on the construction timeline, the center may not open by July 1, 2013;

2)  The center will likely not hit 90% capacity immediately after opening, but may also operate above 90% capacity at times;

3)  This bill allows care at the proposed skilled nursing center for non-veteran spouses of veterans and these individuals would not qualify for the federal VA per diem; and

4)  Residents may pay for services through other means, such as paying with long term care insurance or private payment.

 

 

FY 2013

FY 2014

FY 2015

Anticipated Expenditure Increase:

 

 

 

FEDERAL FUNDS           

0

753,360

753,360

GENERAL FUND

 

TOTAL           

0

 

0

1,261,440

 

2,014,800

1,261,440

 

2,014,800

 

Source of Expenditure Increase:

Daily operating expenses to provide services to residents at the center.

 

Assumption:

Upon completion of center construction, there will be additional Medicaid eligible skilled nursing care beds in the state possibly requiring the state to share in the cost of covering Medicaid eligible residents.

 

Expected annual cost is based partly on financial figures from the Wyoming Retirement Center located in Basin, Wyoming, the only currently licensed, state-owned skilled nursing facility.  Detailed assumptions on estimated annual expenses are as follows:

1)  The center will be administered and operated as other state institutions employing state classified staff and following state administrative rules, policies and practices where appropriate;

2)  The center has two (2) cottages with twelve (12) available resident rooms per cottage (24 potential residents);

a.  To continually staff to admit residents up to center capacity all rooms are calculated into the estimated annual expenses;

3)  Cost of care per resident will be approximately $230 per day;

4)  All residents are Medicaid eligible for daily service cost reimbursement of $172 per day; and

5)  The state and federal percentage share of Medicaid care costs is 50% and 50%, respectively.

 

Daily cost of care rate ($230.00) multiplied by the number of resident rooms (24) multiplied by the number of care days during the year (365 days).

 

$230.00 x 24 residents x 365 days = $2,014,800.00 annual direct care costs

 

To estimate state participation based on the current Medicaid reimbursement rate, non-Medicaid reimbursable state costs are calculated by taking the difference between the total costs of care at the $230.00 daily rate minus the $172.00 Medicaid reimbursement rate; then adding the state's share of Medicaid obligations.

 

$172.00 x 24 residents x 365 days = $1,506,720.00 Medicaid reimbursable costs

$2,014,800.00 – $1,506,720.00 = $505,080.00 non-Medicaid reimbursable state costs

(State cost = ($1,506,720.00 x 50% or 0.5) + $508,080.00 = $1,261,440.00)

(Federal cost = $1,506,720.00 x 50% or 0.5 = $753,360.00)

 

Additional factors impacting expected revenue, especially during its first year of operations, include:

1)  Based on the construction timeline, the center may not open by July 1, 2013;

2)  The center will likely not hit capacity immediately after opening, but may operate at or close to capacity after initial start-up;

3)  Other staffing and operating options, such as any need to contract for services at the center, as well as the eventual location of the center may impact estimated and required expenses; and

4)  The expected state and federal costs will vary depending on the number of residents actually eligible for the Medicaid daily cost reimbursement and whether the state matching percentage changes for the program.

 

The expenditure increase reflected above could be considered an administrative impact.  For consistency and balance with expected revenue estimates, it has been included on this fiscal note.  The complete estimated (daily and annual) cost of care at the facility, including required staffing and overhead expenses, will be outlined in the Agency Estimate of Administrative Impact.


 

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 does not modify any state agency budget or current personnel authorizations.

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:

 

Wyoming Department of Health

 

 

 

 

 

Prepared by:  Michael Swank, LSO           Phone:  777-7881

(Information provided by Rich Cathcart, Wyoming Department of Administration and Information, phone 777-8660; April Getchius, Wyoming Department of Health, phone 777-7995; Larry Barttelbort, Wyoming Veterans' Commission, phone 777-8151)