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