LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 76th Regular Session
March 26, 1999
TO: Honorable John Smithee, Chair, House Committee on
Insurance
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB610 by Janek (Relating to prompt payment of amounts
owed to health care providers under certain health
benefit plans.), As Introduced
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* Two-year Net Impact to General Revenue Related Funds for HB610, As *
* Introduced: impact of $0 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 $0 *
* 2001 0 *
* 2002 0 *
* 2003 0 *
* 2004 0 *
****************************************************
All Funds, Five-Year Impact:
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*Fiscal Probable Savings/(Cost) from Change in Number of State *
* Year Texas Department of Insurance Employees from FY 1999 *
* Operating Account/ GR-Dedicated *
* 0036 *
* 2000 $(142,971) 3.0 *
* 2001 (125,826) 3.0 *
* 2002 (125,826) 3.0 *
* 2003 (125,826) 3.0 *
* 2004 (125,826) 3.0 *
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Technology Impact
Included above in FY 2000 costs are $10,485 for personal computer
hardware and software.
Fiscal Analysis
The bill would amend the Health Maintenance Organization Act, HMO
(Chapter 20A, Vernon s Texas Insurance Code) and Article 3.70-3C, of the
Insurance Code to require prompt payment of physicians and providers.
The bill provides that if an HMO violates Subsection (c), the HMO is
liable to the physician or provider for interest of 10% a year or
reasonable attorney's fees (in addition to the amount owed for services
provided). The HMO is also liable for any other penalty or remedy
authorized by the Insurance Code or another insurance law of Texas. The
administrative penalty under Article 1.10E, of the Insurance Code, may
not exceed $1,000 for each day the invoice remains unpaid in violation of
Subsection (c). Subsection (g) states that this section does not apply
to a capitation payment under an agreement to provide medical care of
health care services under a health care plan.
The bill takes effect September 1, 1999.
Methodology
The Texas Department of Insurance estimates a 50 percent increase in
complaints received from physicians and providers against HMO plans
between 1999 and 2000. It is estimated that complaints will increase 5
percent per year between 2001 and 2004.
The Texas Department of Insurance estimates the need for an additional 3
FTEs, equipment, and other operating expenses to address this additional
workload.
Local Government Impact
No significant fiscal implication to units of local government is
anticipated.
Source Agencies:
LBB Staff: JK, TH, RT, DP