LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session April 11, 1997 TO: Honorable David Sibley, Chair IN RE: Senate Bill No. 976, Committee Report 1st House, Substituted Committee on Economic Development By: Madla Senate Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on SB976 ( Relating to managed care plans issued by managed care organizations under Medicare risk-sharing contracts; imposing administrative penalties.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by SB976-Committee Report 1st House, Substituted FN Revision 1 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 Texas Insurance Code by adding Article 21.52(G). Section 6 of the bill would require TDI to provide an ombudsman to assist Medicare recipients enrolled in a managed care plan and to ensure that managed care organizations subject to this Article are in compliance. This would require the addition of one FTE, at a cost of $51,478 in FY 1998 and $46,332 in FYs 1999 though 2002 to General Revenue Dedicated Fund 036. Methodolgy Cost to General Revenue Dedicated Fund 036 were estimated based on the fact that there are approximately 210,000 Medicare recipients enrolled in managed care plans. Not all would require the services of the ombudsman and of those who do, requests for ombudsman services would be staggered. 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 Texas Employees from Department of FY 1997 Insurance Operating Account/ GR-Dedicated 0036 1998 ($51,478) 1.0 1998 (46,332) 1.0 2000 (46,332) 1.0 2001 (46,332) 1.0 2002 (46,332) 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: 454 Department of Insurance LBB Staff: JK ,TH ,BK