LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 74th Regular Session April 24, 1995 TO: Honorable Hugo Berlanga, Chair IN RE: House Bill No. 2810 Committee on Public Health By: Coleman House of Representatives Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on House Bill No. 2810 (Relating to Medicaid reimbursement for medical nutritionals.) 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 require the Department of Health to expand the scope of benefits included in the Texas Medicaid Program. The bill would require the department to provide reimbursement and coverage for parental (outside the intestinal tract) and enteral (via the intestinal tract) nutrition therapy, medical nutritional products taken orally, restorative feedings that are medically necessary and cost-effective, and nutritional counseling services. The bill would allow the department to establish a prior authorization procedure for the medical nutritionals. The bill would direct the department to include medical nutritionals as prescribed by a physician which are necessary for the nutritional management of an illness, injury, disorder, or other health condition identified by department rule. The bill specifies that coverage of such products under this provision "will not result in any premium paid with respect to the comprehensive Medicaid benefit package." For the purposes of estimating the costs to implement the provisions of this bill, the following assumptions were made: * Medical nutritionals would be made available to Medicaid eligible adults as the expanded benefit. Under current federal and state policies, Medicaid eligible children (under age 21) already receive this benefit through the Early, Periodic Screening, Diagnosis and Treatment (EPSDT) program. * Adults dually eligible for the Medicaid and Medicare benefits are assumed to be covered by Medicare for these services; thus, no costs in this analysis are attributed to this population. * The number of Medicaid adults utilizing these services were estimated to be 5,699 in fiscal year 1996 and 11,871 each year thereafter. It was assumed that it would take the department six months to adopt rules to implement the provisions of the bill and to gain federal approval through a State Medicaid Plan amendment. * The annual costs per client were assumed to be $988. 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 Year of General of Federal Revenue as Match Medicaid Funds For Medicaid Services 1996 $2,122,740 $3,507,872 1997 4,470,922 7,257,626 1998 4,470,922 7,257,626 1999 4,470,922 7,257,626 2000 4,470,922 7,257,626 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 Health, Department of Human Services, Health and Human Services Commission LBB Staff: JK, AZ, DF