LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 76th Regular Session
Revision 2
April 7, 1999
TO: Honorable Patricia Gray, Chair, House Committee on Public
Health
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 Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB494, As Introduced: 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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House Bill 1, as marked, contains $2.5 million in General Revenue for the
2000-01 biennium to allow for the reimbursement rate increase in the
Kidney Health Care program described in the bill.
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 *
****************************************************
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 of Health would be required to develop rules to mandate
participation by manufacturers in the rebate program as a condition of
reimbursement for the manufacturer's drugs in the Kidney Health Care and
Chronically Ill and Disabled Children's programs. In addition, the
department would be required to use the Medicaid Vendor Drug Program's
claims processing and program monitoring 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 if the Department mandates
participation by drug manufacturers in the rebate system as a condition
of participation in the program. 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.
The Department of Health assumes continuation of current policy in terms
of a difference between Medicaid reimbursement rates and Kidney Health
Care rates being absorbed by clients.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies:
LBB Staff: JK, TP, KF