Austin, Texas
                                   FISCAL NOTE
                               75th Regular Session
                                  April 24, 1997
      TO: Honorable Hugo Berlanga, Chair            IN RE:  Senate Bill No. 908, As Engrossed
          Committee on Public Health                              By: Zaffirini
          Austin, Texas
         FROM:  John Keel, Director    
In response to your request for a Fiscal Note on SB908 ( Relating 
to the licensing and inspection of certain hospitals.) this 
office has detemined the following:
         Biennial Net Impact to General Revenue Funds by SB908-As Engrossed
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
The bill would authorize the Department of Health to conduct 
an inspection of a hospital exempt from an annual licensing 
inspection before issuing a renewal license to the hospital 
if the certification or accreditation body has not conducted 
an on-site inspection of the hospital in the preceding three 
There are approximately 123 hospitals currently licensed by 
the Department of Health but not accredited by the Joint Commission 
on the Accreditation of Healthcare Organizations (JCAHO).  Hospitals 
accredited by the JCAHO receive an on-site inspection at least 
every three years.  The Department of Health states that, for 
hospitals that are Medicare certified, funding limitations may 
prevent an on-site inspection from being conducted at least 
every three years.

The Department of Health estimates that 
inspections would be needed at least once every three years 
for all hospitals not accredited by the JCAHO.  In order to 
accomplish this, one new inspection team would be added, with 
seven full-time equivalent positions.  It is estimated that 
licensing fees would be increased to cover the cost of the bill. 
 The Department of Health anticipates increasing licensing fees 
to $10 per bed, which would result in an approximate minimum 
fee of $1,300 and an approximate maximum fee of $10,000.    

First year costs are reduced to reflect a start-up phase.
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) to     of State                                                
            to Hospital        Hospital           Employees from                                          
            Licensing          Licensing          FY 1997                                                 
            Account/           Account/                                                                   
            GR-Dedicated       GR-Dedicated                                                               
            0129               0129                                                                        
       1998        ($304,909)          $304,909               5.0                                    
       1998         (418,355)           418,355               7.0                                    
       2000         (418,355)           418,355               7.0                                    
       2001         (418,355)           418,355               7.0                                    
       2002         (418,355)           418,355               7.0                                    
         Net Impact on General Revenue Related Funds:

              Fiscal Year      Probable Net Postive/(Negative)
                               General Revenue Related 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 significant fiscal implication to units of local government 
is anticipated.
   Source:            Agencies:   501   Department of Health
                      LBB Staff:   JK ,BB