LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
74th Regular Session
May 25, 1995
TO: Honorable Judith Zaffirini, Chair IN RE: Committee Substitute
Committee on Health & Human Services forHouse Bill
Senate No. 2644
Austin, Texas By: Hilderbran
FROM: John Keel, Director
In response to your request for a Fiscal Note on House Bill No.
2644 (relating to licensing and Medicaid certification
requirements for certain nursing facilities and related penalties
and dispute resolution) this office has determined the following:
The bill would make no appropriation but could provide the legal
basis for an appropriation of funds to implement the provisions
of the bill.
The bill provides for the Department of Human Services to
implement rules that "except to the extent necessary to implement
rights granted to an elderly individual under Chapter 102, ...
may not be different from the standards imposed by federal law."
In addition, the bill applies to any dispute between an
institution licensed under Chapter 242, Health and Safety Code,
and the Department of Human Services relating to:
* renewal of a license under Section 242.003;
* suspension or revocation of a license or closing of a license
under Section 242.061;
* assessment of a civil penalty under Section 242.065;
* assessment of a monetary penalty under Section 242.066; or
* assessment of a penalty as described by Section 31.021(k),
Human Resources Code.
The bill also provides for an affected institution to select
binding arbitration as an alternative to contested case hearing
or judicial proceeding relating to the assessment of a civil
penalty. The department shall pay the cost of the arbitration if
the department elects the arbitration. If the institution elects
the arbitration, the cost of the arbitration shall be equally
shared by the Department of Human Services and the institution
electing arbitration. The arbitration rules are to be adopted by
the chief administrative law judge of the State Office of
Administrative Hearings and arbitration proceedings are to be
conducted in accordance with the adopted rules.
The provisions of the bill take effect September 1, 1995 and
applies only to a dispute described by Section 242.251, Health
and Safety Code, as added by this Act, with respect to which
formal proceedings are commenced on or after January 1, 1996.
The Department of Human Services (DHS) has assumed that
approximately 99 institutions will choose arbitration as an
alternative to contested case hearing or judicial proceeding
relating to the assessment of a civil penalty for FY 96 and FY
97, 100 institutions in FY 98, FY 99, and Fiscal Year 2000.
DHS has also assumed that the travel and operating costs per
arbitration would be $991.00. The incremental increases in the
cost of arbitration are consistent with that of the increase in
licensed nursing and personal care institutions.
The State Office of Administrative Hearings' fiscal impact is
based upon the estimated number of cases, as identified by DHS to
referred for arbitration.
The probable fiscal implication of implementing the provisions of
the bill during each of the first five years following passage
is estimated as follows:
Fiscal Probable Cost Out Probable Cost Out Probable Cost Out
Year of General of GR Match For of Federal Funds
Revenue Fund 001 Medicaid 555
1996 $19,715 $49,054 $49,054
1997 15,851 49,054 49,054
1998 15,851 49,550 49,550
1999 15,851 49,550 49,550
2000 15,851 49,550 49,550
Fiscal Change in
Year Number of State
Employees from
FY 1995
1996 .0
1997 .0
1998 .0
1999 .0
2000 .0
Similar annual fiscal implications would continue as long as the
provisions of the bill are in effect.
No fiscal implication to units of local government is
anticipated.
Source: Department of Human Services
LBB Staff: JK, MU, DF