LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session April 30, 1997 TO: Honorable Hugo Berlanga, Chair IN RE: House Bill No. 1939, Committee Report 1st House, Substituted Committee on Public Health By: Coleman House Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on HB1939 ( Relating to Medicaid coverage of certain nutrition therapy and nutrition services.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by HB1939-Committee Report 1st House, Substituted FN Revision 1 Implementing the provisions of the bill would result in a net negative impact of $(3,729,199) 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 amend Section 32.024 of the Human Resources Code, requiring that, subject to the availability of funds appropriated by the Legislature, the state shall provide coverage under the state Medicaid program for enteral nutrition therapy and related nutrition services that are ordered by a physician. The nutrition services must be provided by a licensed dietitian. Methodolgy It is assumed that enteral products used in nursing homes are already covered under nursing home reimbursement. It is assumed that Medicaid recipients under 21 years of age would already receive nutritional services through the program known as the Medicaid Comprehensive Care program (CCP), and that the Aged and Medicare-related groups are covered by Medicare for these services. The estimate of the base population potentially eligible for reimbursement for these services comprises the AFDC adult population and 70% of the Disabled and Blind population; it is assumed that 30% of the Disabled and Blind population is under 21 or over 65. The Department of Health estimated that of the base eligible population, 1.0% would utilize these newly available Medicaid nutrition services at an estimated annual cost of $1,500 per person. The projected total number of individuals utilizing these services would be 3,198 in 1998, 3,179 in 1999, 3,179 in 2000, 3,179 in 2001, and 3,179 in 2002. Costs for providing services by licensed dietitians is estimated at $50.51 per client in 1998, and at $51.00 per client in 1999-2002. Total costs for nutrition and dietitian services would be approximately $4.96 million per year to all funds. The general revenue share of that is assumed to be 37.7% in 1998 and 37.72% in 1999 - 2002. (This fiscal note is based on updated information received from the Department of Health on 4/30/97.) Note: In the event that rebates are negotiated for these nutrition products, the state may generate revenues to offset some of the general revenue costs estimated to implement the provisions of this bill. 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 Probable Savings/(Cost) Savings/(Cost) from General from Federal Funds Revenue Fund 0001 0555 1998 ($1,869,366) ($3,089,165) 1998 (1,859,833) (3,070,796) 2000 (1,859,833) (3,070,796) 2001 (1,859,833) (3,070,796) 2002 (1,859,833) (3,070,796) Net Impact on General Revenue Related Funds: Fiscal Year Probable Net Postive/(Negative) General Revenue Related Funds Funds 1998 ($1,869,366) 1999 (1,859,833) 2000 (1,859,833) 2001 (1,859,833) 2002 (1,859,833) 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: 501 Department of Health LBB Staff: JK ,BB ,MM