LEGISLATIVE BUDGET BOARD
                                   Austin, Texas
         
                                   FISCAL NOTE
                               75th Regular Session
         
                                  April 17, 1997
         
         
      TO: Honorable Hugo Berlanga, Chair            IN RE:  House Bill No. 2017
          Committee on Public Health                              By: Maxey
          House
          Austin, Texas
         
         
         
         
         FROM:  John Keel, Director    
         
In response to your request for a Fiscal Note on HB2017 ( Relating 
to telemedicine services provided under the Medicaid and Medicare 
programs.) this office has detemined the following:
         
         Biennial Net Impact to General Revenue Funds by HB2017-As Introduced
         
Implementing the provisions of the bill would result in a net 
negative impact of $(175,972) 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 implement Texas Performance Review (TPR) recommendation 
HHS14 in "Disturbing the Peace:  The Challenge of Change in 
Texas Government" to have the Texas Medicaid Program reimburse 
providers for telemedicine services.  

The bill would require 
the Health and Human Services Commission to develop and implement 
a system to reimburse providers for Medicaid services delivered 
through a telemedicine program.  The bill would require HHSC 
to review programs in other states, establish billing codes 
and a fee schedule, provide for an approval process before a 
provider can receive reimbursement, establish a state network 
of telemedicine providers, and work with the Telecommunications 
Infrastructure Fund Board to ensure that small rural hospitals 
benefit from telemedicine.  The bill would ensure that state-owned 
health care facilities and teaching hospitals are the primary 
providers in the network.

The bill would require HHSC to 
work with Texas Tech University in seeking a federal waiver 
from the  Health Care Financing Administration which would allow 
the university to receive reimbursement for telemedicine services 
under the Medicare program.
 
Methodolgy
 
HHSC would add two full-time equivalent positions to work on 
the network development, assist providers, and provide technical 
support for the system.  It is assumed that Texas Tech University 
and the Telecommunications Infrastructure Fund Board would not 
require additional resources to implement the provisions of 
the bill.

According to the Comptroller of Public Accounts 
savings achieved by providing telemedicine services could be 
offset by an increase in services that otherwise would not have 
been provided.  The Comptroller also reports that long-term 
savings would result from more timely and accurate diagnosis 
and treatment.  
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 (Cost)    Probable (Cost)    Change in Number   
            from General       from Federal Funds of State                                                
            Revenue Fund                          Employees from                                          
                                                  FY 1997                                                 
            0001               0555                                                                        
       1998         ($74,771)         ($74,771)               1.3                                    
       1998         (101,201)         (101,201)               2.0                                    
       2000          (96,051)          (96,051)               2.0                                    
       2001          (96,051)          (96,051)               2.0                                    
       2002          (96,051)          (96,051)               2.0                                    
 
 
         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            ($74,771)
               1999            (101,201)
               2000             (96,051)
               2001             (96,051)
               2002             (96,051)
 
          
No significant fiscal implication to units of local government 
is anticipated.
          
   Source:            Agencies:   304   Comptroller of Public Accounts
                                         529   Health and Human Services Commission
                                         501   Department of Health
                                         739   Texas Tech University Health Sciences Center
                                         
                      LBB Staff:   JK ,BB ,AZ