COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. No.:         5442-01

Bill No.:          HB 2378

Subject:           Attorneys; Liability; State Employees

Type:              Original

Date:               April 1, 2008

Bill Summary:            The proposal adds certain charitable health care referral networks and professional corporations of a physician to the list of health care providers for whom the State Legal Expense Fund is available for certain claims.

FISCAL SUMMARY

Numbers within parentheses: ( ) indicate costs or losses.

This fiscal note contains 6 pages.

☒ 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 – Administrative Hearing Commission, Department of Mental Health, Department of Health and Senior Services, and the Department of Social Services assume the proposal would have no fiscal impact on their agencies.

Officials from the Office of State Courts Administrator assume the proposed legislation would have no fiscal impact on the courts.

Officials from the Office of the Attorney General (AGO) assume because claims for malpractice or liability may be brought against the state legal expense fund, this provision will create a fiscal impact. This proposal expands the class of health care providers that are eligible for coverage to physicians’ professional corporations and to charitable health care referral networks. AGO assumes the costs associated with this expansion to the state legal expense fund are unknown, but over $100,000.

Officials from the Office of Administration – Division of General Services (COA) assume expanding the state legal expense fund coverage to physician corporations under Chapter 356 who are referred patients from a health department, non-profit health center, federally funded community health center, or a charitable health care referral network exempt from federal taxation pursuant to Section 501(c)(3) who provide medical services without compensation creates the potential for costs that cannot be determined at this time.

The state self-assumes its own liability protection under the state legal expense fund, Section 105.711, RSMo. It is a self-funding mechanism whereby funds are made available for the payment of any claim or judgment rendered against the state in regard to the waivers of sovereign immunity or against employees and specified individuals. Investigation, defense, negotiation or settlement of such claims is provided by the Office of the Attorney General. Payment is made by the Commissioner of Administration with the approval of the Attorney General. COA has reflected the costs affecting the general revenue fund, as general revenue funds the state legal expense fund.

ASSUMPTION (continued)

Officials from the Office of the Secretary of State (SOS) assume 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 proposal for Administrative Rules is less than $2,500. The SOS recognizes this is a small amount and does not expect additional funding would be required to meet these costs. However, SOS also recognizes that many such bills may be passed in a given year and that collectively the costs may be in excess of what the SOS can sustain with their core budget. Any additional required funding would be handled through the budget process.

Oversight assumes the potential liability to the state legal expense fund could exceed $100,000 per fiscal year because the legislation is covering additional professionals under the fund.

FISCAL IMPACT - Small Business

No direct fiscal impact to small businesses would be expected as a result of this proposal.

FISCAL DESCRIPTION

The proposed legislation adds a 501(c)(3) tax-exempt charitable health care referral network and the professional corporation of a physician licensed under Chapter 334, RSMo, to the list of health care providers for whom the state legal expense fund is available for the payment of certain claims filed against a provider.

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

Office of the Attorney General

Office of Administration

            – Division of General Services

            – Administrative Hearing Commission

Office of State Courts Administrator

Department of Mental Health

Department of Health and Senior Services

Department of Social Services

Office of the Secretary of State

                                                                                                Mickey Wilson, CPA

                                                                                                Director

                                                                                                April 1, 2008