LEGISLATIVE BUDGET BOARD
                          Austin, Texas

                           FISCAL NOTE
                       74th Regular Session

                          March 2, 1995



 TO:     Honorable Judith Zaffirini, Chair      IN RE:  Senate Bill No. 10
         Committee on Health & Human Services           By: Zaffirini
         Senate
         Austin, Texas






FROM: John Keel, Director

In response to your request for a Fiscal Note on Senate Bill No.
10 (Relating to the development of a health care delivery system
under the state Medicaid program that results in cost savings to
the state.) 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.

This bill would allow the Health and Human Services Commission to
develop a health care delivery system that restructures the
delivery of health care services provided under the Texas
Medicaid Program.  The bill would allow  the Commission, to the
extent possible,  to develop a  system which would emphasize
prevention, promote continuity of care, and provide a medical
home for Medicaid recipients. 

The bill instructs the Commission to attempt, to the extent
possible, to design a system which allows the state to control
costs associated with growth in the Medicaid program.  The bill
also directs the Commission to maximize financing of the Medicaid
program by using local and state resources currently spent on
indigent health care to obtain federal matching funds and to
expand Medicaid eligibility to include persons who were eligible
to receive indigent health care services through these local and
state programs.  The bill requires that the system design include
methods for ensuring accountability to the state for the
provision of health care services by providing for financial
reporting, quality assurance, and utilization review and would
ensure that both private and public health care providers have    




the opportunity to participate in the system. 
 
The Commission is required to design the system in a manner that
would enable the state to use different types of health care
delivery systems in different state health care service regions
which would be established in consultation with local
governmental entities.  The Commission is authorized to propose
the waiver necessary to obtain federal authorization for a
restructuring of the health care delivery system.

The Department of Health would be required to implement a health
care delivery system developed by the Commission.

The Department of Health and the Health and Human Services
Commission indicated there would be no fiscal impact.  The
University of Texas System reported that "the actual fiscal
impact will be dictated by the level of federal matching funds,
the degree of expanded Medicaid eligibility, and the
aggressiveness and rapidity with which managed care plans are
implemented."


The fiscal implication to  the State or units of local government
cannot be determined.


Source:   Department of Health, Health and Human Services
Commission, The University of Texas System
          LBB Staff: JK, KF, AZ, DF