LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 76th Regular Session
March 15, 1999
TO: Honorable Elliott Naishtat, Chair, House Committee on
Human Services
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB1402 by Gray (Relating to the continuation and
functions of the Texas Rehabilitation Commission.), As
Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB1402, As Introduced: positive impact of $2,428,200 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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The bill would continue the Texas Rehabilitation Commission (TRC) through
September 1, 2007.
General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2000 $915,900 *
* 2001 1,512,300 *
* 2002 1,512,300 *
* 2003 1,512,300 *
* 2004 1,512,300 *
****************************************************
All Funds, Five-Year Impact:
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*Fiscal Probable Savings/(Cost) from Probable Savings/(Cost) from *
* Year General Revenue Fund Federal Funds *
* 0001 0555 *
* 2000 $915,900 $3,384,100 *
* 2001 1,512,300 5,587,700 *
* 2002 1,512,300 5,587,700 *
* 2003 1,512,300 5,587,700 *
* 2004 1,512,300 5,587,700 *
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Fiscal Analysis
The bill would require the Texas Rehabilitation Commission (TRC) to meet
health care industry quality control standards in the approval of medical
services for clients; adopt a system of quality control that includes
medical consultation; include an assessment of whether the medical
services will benefit the client's ability to return to work; and conduct
an analysis of the risk associated with funding medical procedures and
maintain a risk management plan.
The bill would require TRC to develop and implement agency wide
procurement procedures to ensure compliance with state laws governing
best value purchasing; document that a best value review of vendors has
occurred; document the reasons for selecting a vendor; negotiate price
discounts with high volume vendors; consolidate purchases with other
agencies, when possible; and provide public notification to potential
vendors of planned commission purchases.
The bill would require the Rehabilitation Commission Board to adopt rules
and standards governing the determination of rates the commission will
pay for medical services. The Board would be required to annually adopt
a schedule of rates by comparing the proposed rate schedule to other
cost based rates, including Medicaid and Medicare rates, and for any
rate adopted that exceeds Medicaid or Medicare rates, the Board would be
required to document reasons why the adopted rate exceeds other
established rates.
Methodology
The Sunset Advisory Commission (SAC) estimates that a program of
negotiated, competitive purchases would reduce TRC costs. Because
competition and "best value" purchasing are already required under state
and federal law, it is assumed that compliance with these requirements
would not create additional costs. The bill would limit payments for
services to the Medicare limiting charge rate, a decrease in costs for
medical services.
According to the Sunset Advisory Commission, the Rehabilitation
Commission reimbursement rates are currently about 10 percent higher on
average than the Medicare limiting charge rates. SAC estimates that if
TRC capped its payments at the Medicare limiting charge rate, costs for
medical services for the Vocational Rehabilitation Program would
decrease in General Revenue by $915,900 in fiscal year 2000, and $1.5
million per year thereafter. Savings in Federal Funds would be $3.4
million in year 2000 and $5.6 million each year thereafter. Savings
would begin after new fiscal year 2000 rates are established by the
Board.
Local Government Impact
No significant fiscal implication to units of local government is
anticipated.
Source Agencies:
LBB Staff: JK, TP, AZ, ER