LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
February 17, 1997
TO: Honorable David Sibley, Chair IN RE: Senate Bill No. 387
Committee on Economic Development By: Harris/et al.
Senate
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on SB387 ( Relating
to the creation of a rating system and consumer report cards
for the comparison of health care plans.) this office has detemined
the following:
Biennial Net Impact to General Revenue Funds by SB387-As Introduced
Implementing the provisions of the bill would result in a net
negative impact of $(476,000) 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
Chapter 1 of the Insurance Code would be amended by adding Article
1.35A-1 to require that on or before September 1, 1998, the
Office of Public Insurance Counsel (OPIC) shall establish and
implement a rating system to compare and evaluate the quality
of care provided by, and the performance of, HMO benefit plans
and services on an objective basis. OPIC may enter into contracts
as necessary to implement this section. The article would require
that OPIC develop consumer report cards on HMOs licensed in
Texas, to be updated annually. This article would require that
OPIC appoint an 11-member advisory committee to assist and advise
OPIC in developing a rating system and consumer report cards.
Implementing
the provisions of this bill would result in costs to OPIC of
$238,000 per year, for fiscal years 1998 through 2002. This
includes $68,000 for the salaries and benefits of two research
specialists, $125,000 for professional fees for contracting
with vendors to administer surveys, and $45,000 for printing
and postage of report cards.
Methodolgy
Fiscal impacts were estimated based on the assumption that OPIC
would complete the first consumer report card/HMO rating system
by September 1, 1998. OPIC based professional fee fiscal impact
estimates on the cost of administering surveys to 62 HMOs (approximately
$2,000 each). Printing costs were estimated based on the costs
associated with producing 50,000 copies of a 25 page document;
postage costs were estimated based on distributing 15,000 reports
by mail.
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 Change in Number
Savings/(Cost) of State
from General Employees from
Revenue Fund FY 1997
0001
1998 ($238,000) 2.0
1998 (238,000) 2.0
2000 (238,000) 2.0
2001 (238,000) 2.0
2002 (238,000) 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 ($238,000)
1999 (238,000)
2000 (238,000)
2001 (238,000)
2002 (238,000)
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: 454 Department of Insurance
359 Office of Public Insurance Counsel
LBB Staff: TH ,JK ,BK