LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
April 17, 1997
TO: Honorable Hugo Berlanga, Chair IN RE: House Bill No. 3258
Committee on Public Health By: Coleman
House
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on HB3258 ( Relating
to the implementation of Medicaid managed care.) this office
has detemined the following:
Biennial Net Impact to General Revenue Funds by HB3258-As Introduced
Implementing the provisions of the bill would result in a net
negative impact of $(271,895) 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 current law governing the development of
the health and human service delivery system by the Health and
Human Services Commission. The bill would require the Commission
to include methods of financial reporting, quality assurance,
utilization review and contract parameters, certain traditional
providers, and maximal use of existing public health entities.
The bill would also require providers to assure continuity of
care for Medicaid acute and long-term care clients for 12 months
beyond the period of eligibility.
The commission would be
required to design the system in a manner that enables the state
to use different types of health care delivery systems to meet
the needs of different populations, including a pilot project
to deliver services to adults with disabilities and persons
with severe or persistent mental illness, and allow recipients
with special needs to decide whether to participate in a managed
care delivery system.
The bill would establish a Medicaid
Managed Care Legislative Oversight Committee which would be
composed of three members of the Senate appointed by the Lieutenant
Governor and three members of the House of Representatives appointed
by the Speaker of the House. The committee would meet quarterly
with HHSC to receive information about rules proposed or adopted
related to Medicaid managed care and to review specific legislative
recommendations related to Medicaid managed care.
Methodolgy
It is assumed that HHSC would delegate some of the responsibilities
to the Department of Health but that the State Medicaid Office
would add one new full-time equivalent position to implement
the provisions related to the special needs populations, pilot
development, and to support the Commission's responsibilities
related to the legislative oversight committee. The costs associated
with the additional FTE would be phased in the first year ($42,806)
and $56,204 for the remaining years of the pilot. Evaluation
costs of $50,000 are included in the third and fourth years
as part of a standard requirement for a federally approved waiver.
It is assumed that these costs will be matched equally with
federal funds.
It is assumed that modifications to existing
systems will be required in order for the systems to identify
individuals with special health care needs; to ensure that individuals
with special needs are provided the option of fee-for-service
or managed care plans; and to pay health care claims according
to the selected health care delivery system. Based on two recent
changes to the eligibility system which required modifications
to the existing eligibility determination system, it is estimated
that 6,300 programming hours would be required to make the management
information system changes. It is assumed that those hours
would be contracted at a rate of $70.60 per hour and that no
new FTEs would be added for this purpose. It is assumed that
the costs would be funded in part with Medicaid matching dollars
(50% federal and 50% state).
Currently there is not a specific
definition for classifying an individual as one with special
health care needs. In the event that a significant number of
individuals with special health care needs choose not to participate
in a managed care plan, costs for this population may be greater
than for those enrolled in managed care.
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 Change in Number
Savings/(Cost) Savings/(Cost) of State
from General from Federal Funds Employees from
Revenue Fund FY 1997
0001 0555
1998 ($243,793) ($243,793) 1.0
1998 (28,102) (28,102) 1.0
2000 (53,102) (53,102) 1.0
2001 (53,102) (53,102) 1.0
2002 (28,102) (28,102) 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 ($243,793)
1999 (28,102)
2000 (53,102)
2001 (53,102)
2002 (28,102)
Similar annual fiscal implications would continue as long as
the provisions of the bill are in effect.
The provisions of the bill that require providers to continue
coverage 12 months beyond Medicaid eligibility have the potential
of significantly increasing costs to local providers.
Source: Agencies: 324 Department of Human Services
655 Texas Department of Mental Health and Mental Retardation
529 Health and Human Services Commission
501 Department of Health
LBB Staff: JK ,BB ,AZ