Plain language analysis
This rule establishes the fees which participating health care providers must pay to the fund for the fiscal year beginning July 1, 2008. These fees represent a 0% change with fees paid for the 2007-08 fiscal year. The board approved these fees at its meeting on December 12, 2007, based on the recommendation of the board's actuarial and underwriting committee and reports of the fund's actuaries.
The board is also required to promulgate by rule the annual fees for the operation of the injured patients and families compensation mediation system, based on the recommendation of the director of state courts. The recommendation of the director of state courts was reviewed by the board's actuarial and underwriting committee. This rule implements the funding level approved by the board by establishing mediation panel fees for the next fiscal year at $18.00 for physicians and $2.50 per occupied bed for hospitals, representing a increase of $1.00 per physician and $1.50 per occupied bed for hospitals from 2007-08 fiscal year mediation panel fees.
Comparison with federal regulations
To the fund board's and OCI's knowledge there is no existing or proposed federal regulation that is intended to address patient compensation fund rates, administration or activities.
Comparison of rules in adjacent states
To the fund board's and OCI's knowledge there are no similar rules in the adjacent states to compare this rule to as none of these states have a patients compensation fund created by statute where rates are directed to be established yearly by rule as is true in Wisconsin.
Summary of factual data and analytical methodologies
None. This rule establishes annual fund fees pursuant to the requirements of the above-noted Wisconsin statutes.
Analysis and supporting documents used to determine effect on small business
This increase in mediation panel fees will have an effect on some small businesses in Wisconsin. The mediation panel fee is assessed only on physicians and hospitals, not on corporations or other health care entities. The increase will affect only those small business that pay the mediation panel fees on behalf of their employed physicians. However, the increase in the mediation panel fee will not have a significant effect nor should it negatively affect the small business's ability to compete with other providers.
Initial Regulatory Flexibility Analysis
This rule will have little or no effect on small businesses. The increase contained in the proposed rule will require providers to pay an increased mediation panel fee which will increase the operational expenses for the providers. However, this increase is very minimal and will have no effect on the provider's competitive abilities.
Fiscal Estimate
Summary
The Injured Patients and Families Compensation Fund (IPFCF or Fund) is a segregated fund. Annual Fund fees are established to become effective each July 1 based on actuarial estimates of the Fund's needs for payment of medical malpractice claims. The proposed fees were approved by the Fund's Board of Governors at its December 12, 2007 meeting.
The Fund is a unique fund; there are no other funds like it in the country. The WI Fund provides unlimited liability coverage and participation is mandatory. These two features make this Fund unique compared to funds in other states. The only persons who will be affected by this rule change are the Fund participants themselves as the IPFCF is fully funded through assessments paid by Fund participants.
There is no effect on GPR.
Private sector fiscal effect
The increase in fees promulgated by this rule does not result in a significant fiscal effect on the private sector. The cost of mediation panel fees is a very small portion of the expenses incurred by health care providers. Although a health care provider may pass this increase on to its patients, there will not be a significant fiscal effect on the private sector as a result of this proposed rule.
State fiscal effect
None
Local fiscal effect
None
Long-range fiscal implications
None
Notice of Hearing
Workforce Development
NOTICE IS HEREBY GIVEN that pursuant to ss.
49.155 (6) and
227.11 (2) (a), Stats., the Department of Workforce Development proposes to hold a public hearing to consider rules affecting ch.
DWD 56, relating to child care rates and affecting small businesses.
Hearing Information
March 10, 2008
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MADISON
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Monday
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G.E.F. 1 Building, D203
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1:30 p.m.
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201 E. Washington Avenue
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Interested persons are invited to appear at the hearing and will be afforded the opportunity to make an oral presentation of their positions. Persons making oral presentations are requested to submit their facts, views, and suggested rewording in writing.
Visitors to the GEF 1 building are requested to enter through the left East Washington Avenue door and register with the customer service desk. The entrance is accessible via a ramp from the corner of Webster Street and East Washington Avenue. If you have special needs or circumstances regarding communication or accessibility at the hearing, please call (608) 267-9403 at least 10 days prior to the hearing date. Accommodations such as ASL interpreters, English translators, or materials in audio format will be made available on request to the fullest extent possible.
Agency Contact Person
Copy of Rule
An electronic copy of the proposed rules is available at
http://www.dwd.state.wi.us/dwd/hearings.htm. A copy of the proposed rules is also available at
http://adminrules. wisconsin.gov. This site allows you to view documents associated with this rule's promulgation, register to receive email notification whenever the Department posts new information about this rulemaking order, and submit comments and view comments by others during the public comment period. You may receive a paper copy of the rule or fiscal estimate by contacting:
Elaine Pridgen
Office of Legal Counsel
Dept. of Workforce Development
P.O. Box 7946
Madison, WI 53707-7946
phone: (608) 267-9403
Submission of Written Comments
Written comments on the proposed rules received at the above address, email, or through the http://adminrules. wisconsin.gov web site no later than March 11, 2008, will be given the same consideration as testimony presented at the hearing.
Analysis Prepared by the Department of Workforce Development
Statutory authority
Statutes interpreted
Explanation of agency authority
Section
49.155 (6), Stats., provides that, subject to review and approval by the department, each county shall establish maximum reimbursement rates for child care services provided to eligible individuals by licensed and certified child care providers. Each county shall set the rate for licensed providers so that at least 75% of the number of places for children within the licensed capacity of all child care providers in the county can be purchased at or below that maximum rate. The maximum reimbursement rate for Level I certified providers may not exceed 75% of the rate established for licensed providers, and the maximum reimbursement rate for Level II certified providers may not exceed 50% of the rate established for licensed providers.
Summary of the proposed rule
Under s.
DWD 56.06, the Department or each county must survey all licensed providers each year to determine the child care prices they charge the general community. The county or tribal agency annually sets maximum reimbursement rates based on the survey, unless the Department sets multi-county rates. The maximum rate for licensed providers is set so that at least 75% of the number of places for children within the licensed capacity of all child care providers in the county can be purchased at or below that maximum rate. Separate maximum rates are set for licensed group child care centers, licensed family child care centers, Level I certified family child care providers, and Level II certified family child care providers. Separate maximum rates are also set for children in various age groupings. The current rates are multi-county rates set by the Department in 2006 under s.
DWD 56.06 (1) (a) 1.
Prior to 2007, the adjusted rates based on the annual survey have generally become effective January 1 of the new year. The child care rates were not adjusted in January 2007 due to a projected SFY 2007 budget shortfall.
2007 Wisconsin Act 20 reflects that the child care rates will not be increased for the 2008-2009 biennium. This rule provides that the rates will not be adjusted for 2008 and 2009, and the rates effective on December 31, 2006, will remain in effect. A corresponding emergency rule that was effective January 1, 2008, provides that rates will not be increased for 2008.
Summary of factual data and analytical methodologies
The Governor's proposed child care budget included numerous cost containment strategies, including the rate freeze. (Legislative Fiscal Bureau Budget Paper #891, May 22, 2007) The Legislature added $65 million to the child care budget above the Governor's proposal and deleted or modified many of the Governor's other cost containment proposals. The freeze on child care rates was not changed and is included in
2007 Wisconsin Act 20.
Comparison with federal regulations
Under
45 CFR 98.43, a state must certify that state payment rates for the provision of child care services funded under the Child Care and Development Fund are sufficient to ensure equal access to child care services for eligible families as families not eligible for child care assistance. At a minimum, the state must show that it considered 3 key elements in determining that its child care program provides equal access for eligible families: 1) Adequate payment rates based on a local market rate survey conducted no earlier than two years prior to the effective date of the current plan; 2) Choice of the full range of categories and types of providers; and 3) Affordable copayments.
In the commentary issued with the regulation, the Administration for Children and Families notes that rates established at least at the 75th percentile of the market rate would be regarded as providing equal access. Under the former title IV-A child care program, states were required to set rates at this level. (63 FR 39936, 39959, July 24, 1998)
Comparison with rules in adjacent states
A 2007 study by the National Women's Law Center, entitled State Child Care Assistance Policies 2007: Some Steps Forward, More Progress Needed compared state 2007 reimbursement rates to market rates for child care centers. The study found that Wisconsin was one of 9 states that had reimbursement rates at or above the 75th percentile of the market rate in 2007 and one of 22 states that had reimbursement rates at or above the 75th percentile of the market rate in 2001.
Michigan. Reimbursement rates have not been increased since 1997. Rates in 2007 were at the 75th percentile of 1996 market rates. In Wayne County, the percentage difference between the state rate and the 75th percentile of the market rate was -42% for center care of a 4-year-old and -46% for care of a one-year-old.
Minnesota. In Hennepin County, the percentage difference between the state 2007 rate and the 75th percentile of the market rate was -9% for center care of a 4-year-old and -10% for care of a one-year-old.
Illinois. In Cook County, the percentage difference between the state 2007 rate and the 75th percentile of the market rate was -35% for center care of a 4-year-old and -28% for care of a one-year-old.
Iowa. The percentage difference between the statewide 2006 rate and the 75th percentile of the market rate was -10% for center care of a 4-year-old and -7% for care of a one-year-old.
The National Women's Law Center study
State Child Care Assistance Policies 2007: Some Steps Forward, More Progress Needed is available at
http://www.nwlc.org/pdf/ StateChildCareAssistancePoliciesReport07web.pdf.
Initial Regulatory Flexibility Analysis
The emergency and permanent rules are merely implementing the policy and funding provided for the child care subsidy program in
2007 Wisconsin Act 20. The policy of freezing child care rates does not have a significant economic impact on small businesses that are child care providers statewide. Due to interest expressed in the impact of freezing child care rates by the Small Business Regulatory Review Board in 2007, the Department is submitting an analysis of the 2008 rules implementing the rate freeze for review under s.
227.14 (2g), Stats.
Analysis used to determine effect on small businesses
The funding provided for the child care subsidy program under 2007 Wisconsin Act is based on the assumption that child care rates will not be increased for the 2008-2009 biennium.
The child care subsidy represents an estimated 21 percent of child care revenues received by child care providers. In state fiscal year 2008, the estimated cost avoidance of not increasing rates is $14.2 million, which is 4.2% of program funding. This is a .9% total impact in lost revenue growth to child care providers statewide. In state fiscal year 2009, the estimated cost avoidance of not increasing rates is $21.3 million, which is 6.0% of program funding. This is a 1.3% total impact in lost revenue growth to child care providers statewide.
Further analysis of the effect of freezing rates on certain regions of the state may be found in the Department's submission to the Small Business Regulatory Review Board. This document may be obtained from the
http://adminrules.wisconsin.gov web site or by contacting Elaine Pridgen, DWD Small Business Regulatory Coordinator, at
elaine.pridgen@dwd.state.wi.us or (608) 267-9403.
Fiscal Estimate
Summary
By not increasing the maximum county rates reimbursed to child care providers for the Wisconsin Shares child care subsidy program, the Department will avoid the increased cost of using the rates based on the latest provider survey. By comparing the current rates used for reimbursement versus the rates that would otherwise go into effect and then annualizing the results, it is estimated that the Department will realize about $14,200,000 in avoided costs in direct child care subsidies on a full-year annualized basis for State Fiscal Year 2008 and $21,300,000 in avoided costs for State Fiscal Year 2009, but current-year appropriations are still anticipated to be fully expended.
State fiscal effect
Decrease costs
Local fiscal effect
None
Long-range fiscal implications
None
