LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
74th Regular Session
April 12, 1995
TO: Honorable John Smithee, Chair IN RE: House Bill No. 2766
Committee on Insurance By: Smithee,
House of Representatives VandePutte
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on House Bill No.
2766 (relating to fairness and choice to patients and providers
under managed care health benefit plans; providing a penalty)
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 would amend the Insurance Code to add the "Patient
Protection Act" and to alter provisions relating to utilization
review regulation. The bill would require health maintenance
organizations (HMOs), insurance companies, hospital or medical
service plans, or any entity providing managed care coverage to
file a managed care plan for certification with the Department of
Insurance.
Implementation of the provisions of the bill would result in
significant fiscal implications for the Department of Insurance.
The Department estimates that 225 preferred provider
organizations, 250 utilization review agents, 63 non-profit
managed care entities and an unknown number of for-profit managed
care entities would be required to file for certification each
managed care plan offered. A new staff section would be needed
to process the applications filings for certification. Revenue
increases would result beginning in fiscal year 1997 from a
proposed fee of $350 per filing.
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 Revenue Change in
Year of Department of Gain to Department Number of State
Insurance of Insurance Employees from
Operating Operating FY 1995
Fund 036 Fund 036
GR Consolidated GR Consolidated
1996 $320,010 $0 6.0
1997 1,218,543 1,050,000 26.0
1998 1,020,046 700,000 24.0
1999 1,020,046 1,400,000 24.0
2000 1,020,046 1,225,000 24.0
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 Insurance, Department of Health
LBB Staff: JK, RM, RR