LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 74th Regular Session April 25, 1995 TO: Honorable Judith Zaffirini, Chair IN RE: Senate BillNo. 1675 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. 1675 (Relating to powers and duties of the Health and Human Services Commission.) 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 strengthen the powers and duties of the Health and Human Services Commission. Additional powers and duties which the bill would authorize for the HHSC include: * Approval of health and human services (HHS) agencies' strategic plans and biennial updates. * Comprehensive budget and planning authority for HHS agencies in order to establish an integrated eligibility determination and service delivery system. * Approval of HHS agency legislative appropriations requests prior to agency submission to the Legislature and the Governor. * Approval authority of HHS agency annual operating budgets prior to adoption of the budget by the respective agency's board. * Approval of the transfer of funds between strategies prior to the transfer of funds for agencies under its jurisdiction. * Receipt of projected expenditures by budget strategy compared to the HHS agency's operating budget on a quarterly basis. * Approval of any adjustment to an operating budget for agencies under its jurisdiction. * Approval of federal fund plans submitted by agencies designated as the single state agency for the State. * Evaluate the feasibility of designating the Commission as the single state agency for federal funds received for a health and human service purpose. * Approval of plans prior to submission to the Department of Information Resources. * Coordination and approval of caseload estimates made for programs administered by health and human services agencies. * Review of health and human services agency formulas which relate to the distribution of funds. * Approval of office space for HHS agency needs. * Use/assignment of existing HHS agency staff to the extent requested. The bill would require the Commission to submit to the Governor, Lieutenant Governor, Speaker of the House of Representatives, Comptroller, and Legislative Budget Board, a work plan outlining the activities of the commission for the fiscal year. The work plan would be submitted by the end of the first month of a fiscal year and would establish priorities for the commission's activities based on available resources. The bill would allow the Commissioner of Health and Human Services to require specific actions of a health and human service agency in order to streamline the delivery of services. It would establish reporting requirements related to efforts made by health and human services agencies to streamline services. The bill would require the Commission to expand its existing integrated eligibility pilot programs to include the Harris County Hospital District and the University of Texas Medical Branch at Galveston. In addition, the Commission would be required to study the feasibility of enabling contractors or agencies other than the Department of Human Services to provide eligibility determinations and certifications. The study would be required to consider error rates, the state's potential liability, expansion of client population, and federal single state agency restrictions. The bill would require, by September 1, 1996, the HHSC complete its development and substantial implementation of its plan for an integrated eligibility determination and service delivery system subject to the availability of funds to HHSC and HHS agencies. The bill would require that the plan achieve at least one percent savings in the cost of providing administrative and other services resulting from streamlining and elimination of duplicative costs and services. The bill would implement a number of Comptroller's recommendations from Gaining Ground. Estimates are reflected in the table below. * HHS3 strengthens the powers of the Commission. Comptroller believes savings will be achieved but estimates cannot be determined. * HHS6 requires coordination of caseload estimates. The fiscal impact of this provision of the bill cannot be determined. * HHS8 requires expansion of integrated eligibility pilot programs in the Harris County Hospital District and the University of Texas Medical Branch at Galveston. The Comptroller estimates indicate that hospital and Department of Human Services staff time required will be about 60% less than in the current system. Savings would be offset by the additional evaluation and auditing required to ensure error rates are maintained within acceptable limits. Comptroller estimates of savings correspond to HCHD (local funds) and UTMB at Galveston (state funds) and relate to an anticipated reduction in the number of DHS eligibility and clerical workers for which the entities pay matching dollars. The bill would require that implementation of certain provisions of this bill be accomplished within available funds. To the extent the Health and Human Services Commission exercises its authority to use staff and other resources of HHS agencies to carry out the provisions of the bill and such efforts do not hamper the responsibilities of affected agencies, costs would be absorbed within existing resources. To fully integrate service delivery for health and human services would require investment in automation systems. Costs for the 1996-97 biennium have been estimated to be $47.3 million in all funds and $28.5 million in general revenue if the system is purchased or $33.0 million in all funds and $18.5 million in general revenue if the system is acquired through the Master Lease Program. The Health and Human Services Commission stated that the costs of the system is an issue for the conference committee on appropriations because the bill specifies that the integration effort be accomplished within available funds. 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 Revenue Probable Savings Change in Year Gain to Local to General Number of State Funds Revenue Fund 001 Employees from FY 1995 1996 $196,000 $233,000 (41.0) 1997 196,000 233,000 (41.0) 1998 196,000 233,000 (41.0) 1999 196,000 233,000 (41.0) 2000 196,000 233,000 (41.0) Similar annual fiscal implications would continue as long as the provisions of the bill are in effect. Source: Health and Human Services Commission, Comptroller of Public Accounts, Department of Human Services LBB Staff: JK, AZ, DF