LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 74th Regular Session March 21, 1995 TO: Honorable Judith Zaffirini, Chair IN RE: Committee Substitute Committee on Health & Human Services for Senate Senate Bill No. 602 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 Health and Human Services Commission and each health and human services agency administering a component of the Medicaid Program to jointly develop a system: 1) to coordinate and integrate state Medicaid databases; 2) to facilitate the comprehensive analysis of Medicaid data; and 3) to detect fraud perpetrated by a program provider or client. The Health and Human Service Commission is to coordinate efforts of those agencies involved in the system development and any other agencies involved in health related computer database activities to minimize costs and duplication of efforts. The fiscal implications related to the Commission correspond to integrating information between the operating agencies. All costs would be contracted services in fiscal year 1996 ($257,012). There would be no increase in FTEs at the Commission. It is anticipated that staff would be borrowed from the operating agencies during the requirements definition and system development phases. Costs associated with these activities would be paid with both federal funds and general revenue (50:50). The fiscal implications for the Department of Health include three administrative positions ($121,461) and equipment costs of $200,000 for the first year and $35.000 for each of the succeeding years for software and related items. The fiscal implications for the Department of Human Services assume that the agency would be able to develop the means for HHSC's integrated database network to access a decision support services application that would download DHS' Medicaid eligibility and long term care data into an environment that would facilitate the analysis of this information. Additional costs related to the any increased usage of DHS' data network cannot be estimated at this time due to unknown usage in the future. Costs for DHS only correspond to fiscal year 1996 and relate to equipment ($50,000) and development costs ($500,000). The system would be completed by the end of fiscal year 1996. Savings identified from accessing the information to determine fraudulent activities by providers or clients cannot be estimated at this time. 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 $589,236 $539,237 3.0 1997 78,230 78,231 3.0 1998 78,230 78,231 3.0 1999 78,230 78,231 3.0 2000 78,230 78,231 3.0 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: Legislative Budget Board, Health and Human Services Commission, Department of Health, Department of Human Services LBB Staff: JK, AZ, DF