LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
April 28, 1997
TO: Honorable John T. Smithee, Chair IN RE: House Bill No. 2058, Committee Report 1st House, Substituted
Committee on Insurance By: Delisi
House
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on HB2058 ( Relating
to the certification, operation, powers, and duties of certain
integrated health plans.) this office has detemined the following:
Biennial Net Impact to General Revenue Funds by HB2058-Committee Report 1st House, Substituted
Implementing the provisions of the bill would result in a net
impact of $0 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
This bill would amend the Insurance Code to allow the Commissioner
of the Texas Department of Insurance (TDI) to issue a certificate
of authority to a nonprofit health maintenance organization
(HMO) which satisfies the bill's requirements for licensure
as an integrated health plan (IHP).
Article 20B.011 would
require the Commissioner of TDI to issue a certificate of authority
as an IHP to an eligible nonprofit HMO. Article 20B.013 would
allow the Commissioner to revoke a certificate of authority.
It is assumed that TDI would be required to regulate IHPs to
ensure that the provisions of the bill are followed.
To process
the form filings and to handle the workload created by the regulation
of IHPs, it is estimated that TDI would need to hire one Nurse
V at a cost to TDI General Revenue Dedicated Fund 036 of $54,531
in FY 1998 and $49,385 in FYs 1999 though 2002. Revenue from
the original certificate of authority filing and from subsequent
evidence of coverage and information only filings by IHPs would
result in a revenue gain to TDI General Revenue Dedicated Fund
036 of $22,500 in FY 1998 and $7,500 in FYs 1999 through 2002.
Methodolgy
Costs and revenues are based in the following assumptions:
(1)
TDI would be responsible for the regulation of IHPs.
(2)
TDI would need to establish appropriate standards relating to
quality assurance of IHPs and administrative rules to implement
this bill.
(3) TDI estimates that there would be three new
applications for certificates of authority as IHPs. At a cost
of $7,500 each, TDI General Revenue Dedicated Fund 036 would
experience a revenue gain of $22,500 in FY 1998.
(4) In FYs
1999 though 2001, TDI estimates that the three IHPs would file
a total of 20 evidence of coverage form filings and 10 information
only form filings per year. Each IHP would pay to TDI $100
per evidence of coverage filing and $50 per information only
filing. Total revenue gain to TDI General Revenue Dedicated
Fund 036 would be $7,500 per year.
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 Revenue Change in Number
Savings/(Cost) Gain/(Loss) from of State
from Texas Texas Department Employees from
Department of of Insurance FY 1997
Insurance Operating
Operating Account/
Account/ GR-Dedicated
GR-Dedicated
0036 0036
1998 ($54,531) $22,500 1.0
1998 (49,385) 7,500 1.0
2000 (49,385) 7,500 1.0
2001 (49,385) 7,500 1.0
2002 (49,385) 7,500 1.0
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 $0
1999 0
2000 0
2001 0
2002 0
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:
LBB Staff: JK ,TH ,BK