Division of the Budget
Landon State Office Building Phone: (785) 296-2436
900 SW Jackson Street, Room 504 larry.campbell@ks.gov
Topeka, KS 66612 Division of the Budget http://budget.kansas.gov
Larry L. Campbell, Director Laura Kelly, Governor


February 13, 2019


The Honorable Susan Concannon, Chairperson
House Committee on Children and Seniors
Statehouse, Room 149-S
Topeka, Kansas 66612
Dear Representative Concannon:
SUBJECT: Fiscal Note for HB 2149 by House Committee on Children and Seniors
In accordance with KSA 75-3715a, the following fiscal note concerning HB 2149 is
respectfully submitted to your committee.
HB 2149 would assess penalties to the Kansas Department of Health and Environment’s
(KDHE) eligibility contractor if any nursing facility eligibility determinations are not completed
within 45 days. The bill indicates that the penalty would be charged by KDHE to the contractor
and made payable to the applicant’s nursing facility. The fine would be 1.0 percent of the per diem
reimbursement for applications that would be deemed to be beyond the 45 days under normal
exceptions for unusual circumstances, and the fine would be 3.0 percent for applications that would
not be identified as normal exceptions. KDHE indicates that there is a potential that applications
that go beyond 45 days are a result of a lack of information from the applicant, and it should be
noted that these applications would still result in a fine against the contractor.
KDHE indicates it would incur costs for administrative expenses to track, calculate and
administer the provisions of the HB 2149. The Department would require additional FTE positions
to track each application that is beyond 45 days and determine whether the delay is deemed as a
normal exception or not. The Department indicates that it is unclear who will be charged with
monitoring payments to the nursing facilities and if there would be any required reporting.
The penalties assessed against the contractor would be approximately $1.94 per day for the
late applications that fall under the provision for unusual circumstances and $5.82 per day for those
that do not. The bill would require KDHE to amend the current eligibility contract, in order to
take effect in FY 2019, as the current contract is in play through June 30, 2019. Future contracts
that include this penalty provision could increase the cost to the contract for the state. Since the
state already has performance standard and assesses liquidated damages against the contractor for
The Honorable Susan Concannon, Chairperson
Page 2—HB 2149

untimely processing, KDHE indicates this would be duplicative. KDHE indicates it is not possible
to estimate the number of exceptions that would arise or how complex and time-consuming they
would be. Therefore, a precise fiscal effect cannot be determined. Any fiscal effect associated
with HB 2149 is not reflected in The FY 2020 Governor’s Budget Report.


Sincerely,

Larry L. Campbell
Director of the Budget


cc: Dan Thimmesch, Health & Environment