LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 76th Regular Session
May 10, 1999
TO: Honorable Judith Zaffirini, Chair, Senate Committee on
Human Services
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB494 by Maxey (Relating to drug benefits available
under certain health care programs administered by the
Texas Department of Health.), As Engrossed
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB494, As Engrossed: positive impact of $296,972 through the *
* biennium ending August 31, 2001. *
* *
* The bill would make no appropriation but could provide the legal *
* basis for an appropriation of funds to implement the provisions of *
* the bill. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2000 $10,853 *
* 2001 286,119 *
* 2002 286,119 *
* 2003 286,119 *
* 2004 286,119 *
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All Funds, Five-Year Impact:
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*Fiscal Probable Savings/(Cost) from Probable Revenue Gain/(Loss) *
* Year General Revenue Fund from General Revenue Fund *
* 0001 0001 *
* 2000 $(814,946) $825,799 *
* 2001 (814,946) 1,101,065 *
* 2002 (814,946) 1,101,065 *
* 2003 (814,946) 1,101,065 *
* 2004 (814,946) 1,101,065 *
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Fiscal Analysis
The bill would require the Department of Health to develop a drug
manufacturer rebate program for drugs purchased in the Kidney Health
Care and the Chronically Ill and Disabled Children's programs. The
department would be required to use the Medicaid Vendor Drug Program's
claims processing and program monitoring procedures, prior authorization
safeguards, dispute resolution procedures and approval criteria,
emergency access procedures, pharmacy network, and reimbursement rates
for the consolidated program. If reimbursement rates for certain
medications do not exist in the Medicaid program, the department would
be allowed to develop new rates.
Methodology
The department estimates that some additional revenues would be generated
through the development of a rebate system. The numbers in the table
above reflect the most recent revenue estimates available from the
Department of Health. Some additional costs would be incurred in the
Kidney Health Care program as that program currently reimburses, on
average, 32 percent less than the Vendor Drug Program for
immunosuppressant drugs. The cost estimates reflect $814,946 per year
associated with an increase in reimbursement rates.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 501 Department of Health
LBB Staff: JK, TP, TH, KF