LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
74th Regular Session
May 1, 1995
TO: Honorable Judith Zaffirini, Chair IN RE: Committee Substitute
Committee on Health & Human Services for Senate
Senate Bill No. 1596
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on Senate Bill No.
1596 (Relating to arbitration of alleged violations of law
relating to convalescent and nursing homes and related
institutions.) 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 applies to any dispute between an institution licensed
under Chapter 242, Health and Safety Code, and the Department of
Human Services relating to:
* renewal of a license under Section 242.033;
* suspension or revocation of a license or closing of a
facility under Section 242.061 or
242.062; or
* assessment of an administrative penalty under Section
242.066.
The bill provides that an affected institution select binding
arbitration as an alternative to contested case hearing. The
cost of the arbitration shall be equally shared by the Department
of Human Services and the institution electing arbitration.
The bill takes effect September 1, 1995, and applies only to a
disputes described by Section 242.251, Health and Safety Code, as
added by this Act, with respect to which formal proceedings are
commenced on or after January 1, 1996.
The Department of Human Services has assumed that approximately
162 institutions will choose arbitration as an alternative to
contested case hearing.
The department has also assumed that the travel and operating
costs per arbitration would be $1,191. The incremental increases
in the cost of arbitration are consistent with that of the
increase in licensed nursing and personal care institutions.
Since the costs of the arbitration are to be shared by the
institution and the department, the costs reflected in this
fiscal note are those that apply to the Department of Human
Services.
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 Probable Cost Out
Year of General of GR Match For of Federal Funds
Revenue Fund 001 Medicaid 555
1996 $95,628 $36,537 $60,777
1997 97,399 37,214 61,902
1998 101,532 38,793 64,527
1999 105,662 40,372 67,155
2000 110,976 42,402 70,530
Fiscal Change in
Year Number of State
Employees from
FY 1995
1996 .0
1997 .0
1998 .0
1999 .0
2000 .0
Similar annual fiscal implications would continue as long as the
provisions of the bill are in effect.
Source: Department of Human Services
LBB Staff: JK, MU, DF