LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
March 18, 1997
TO: Honorable Hugo Berlanga, Chair IN RE: House Bill No. 1377
Committee on Public Health By: Maxey
House
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on HB1377 ( Relating
to drug benefits available under certain health care programs
administered by the Texas Department of Health.) this office
has detemined the following:
Biennial Net Impact to General Revenue Funds by HB1377-As Introduced
Implementing the provisions of the bill would result in a net
positive impact of $1,318,000 to General Revenue Related Funds
through the biennium ending August 31, 1999.
The bill would make no appropriation but could provide the legal
basis for an appropriation of funds to implement the provisions
of the bill.
Fiscal Analysis
The bill would require the Texas Department of Health to combine
the drug reimbursement portions of the Chronically Ill and Disabled
Children's Services Program and the Kidney Health Care Program
with the Medicaid Vendor Drug Program.
The bill would implement
Texas Performance Review recommendation HHS 15 in Disturbing
the Peace.
Methodolgy
Consolidating the reimbursement process would lead to the elimination
of nine full-time equivalent positions. The savings are associated
with the reduced positions and with capturing more Kidney Health
Care and Chronically Ill and Disabled Children's Program claims
under the Medicaid Program for federal reimbursement. Federal
costs are associated with the capturing of more Kidney Health
Care and Chronically Ill and Disabled Children's Program claims
under Medicaid for federal reimbursement. Revenue gains identified
below are associated with implementing a manufacturer drug rebate
equal to that in the Medicaid program or 21 percent of drug
ingredient costs. New costs identified below are associated
with information resources systems modifications and operating
costs and with one staff person to collect information for the
drug rebate system in the short run. It is assumed that because
federal funds in the Chronically Ill and Disabled Children's
Program are block grant funds, all rebate revenue would accrue
to general revenue.
The probable fiscal implications of implementing the provisions
of the bill during each of the first five years following passage
is estimated as follows:
Five Year Impact:
Fiscal Year Probable Savings Probable (Cost) Probable Revenue Probable Change in Number
from General from General Gain General Savings/(Cost) of State
Revenue Fund Revenue Fund Revenue Fund -- from Federal Funds Employees from
Rebates FY 1997
0001 0001 0001 0555
1998 $0 ($862,000) $1,059,000 $0 1.0
1998 359,863 (537,000) 1,298,137 (188,001) (4.5)
2000 718,726 (338,000) 1,184,274 (376,001) (9.0)
2001 718,726 (338,000) 1,184,274 (376,001) (9.0)
2002 718,726 (338,000) 1,184,274 (376,001) (9.0)
Net Impact on General Revenue Related Funds:
The probable fiscal implication to General Revenue related funds
during each of the first five years is estimated as follows:
Fiscal Year Probable Net Postive/(Negative)
General Revenue Related Funds
Funds
1998 $197,000
1999 1,121,000
2000 1,565,000
2001 1,565,000
2002 1,565,000
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: Agencies: 304 Comptroller of Public Accounts
501 Department of Health
324 Department of Human Services
LBB Staff: JK ,BB ,KF