LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 74th Regular Session February 21, 1995 TO: Honorable Judith Zaffirini, Chair IN RE: Senate Bill No. 602 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. 602 (Relating to the development and implementation of a computer database to reduce fraud and abuse in the Medicaid program.) 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 Information Resources, in conjunction with the Health and Human Services Commission, to develop and implement a database to detect fraud perpetrated by a program provider or a client. Assumptions included in the estimate of fiscal implications were: inclusion of a probable total of four new FTEs, primarily programmers; certain costs would accrue to Texas Department of Mental Health and Mental Retardation and Texas Department of Health; and costs for the Department of Information Resources associated with the implementation of the provisions of the bill would be funded through interagency contracts and would be included in amounts listed below. To the extent that the database is established and utilized during the first fiscal year of the biennium and provides a deterrent to fraudulent activities, it is probable that savings would accrue through active examination of providers and client activity. Total savings cannot be estimated, however, if the system were established during the first year it is anticipated that savings would be sufficient to offset any costs indicated below. 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 Change in Year of General of Federal Funds Number of State Revenue Fund 001 555 Employees from FY 1995 1996 $106,538 $267,269 4.0 1997 65,288 143,519 4.0 1998 65,288 143,519 4.0 1999 39,115 117,346 4.0 2000 39,115 117,346 4.0 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 Information Resources, Department of Human Services, Department of Health, Health and Human Services Commission, Texas Department of Mental Health and Mental Retardation LBB Staff: JK, KF, AZ, DF