LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session April 13, 1999 TO: Honorable Judith Zaffirini, Chair, Senate Committee on Human Services FROM: John Keel, Director, Legislative Budget Board IN RE: HB1503 by Gray (Relating to the continuation and functions of the Interagency Council on Early Childhood Intervention.), As Engrossed ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * HB1503, As Engrossed: positive 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. * * * * The bill would continue the Interagency Council on Early Childhood * * Intervention (ECI) and set a new sunset date of September 1, 2011. * ************************************************************************** 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: *************************************************************************** *Fiscal Probable (Cost) from Federal Probable Savings from Federal * * Year Funds Funds * * 0555 0555 * * 2000 $(50,000) $2,464,000 * * 2001 0 2,464,000 * * 2002 0 2,464,000 * * 2003 0 2,464,000 * * 2004 0 2,464,000 * *************************************************************************** Fiscal Analysis The bill would require ECI to determine the cost-effectiveness of the Texas Rehabilitation Commission's (TRC) automated systems to plan, manage, and maintain records of client services, not later that March 1, 2000. The bill would require ECI to select providers and renew provider contracts on a "best value" basis. It also would require the agency and the Health and Human Services Commission (HHSC) to review the ECI funding system to maximize federal, private and local funding. According to the Sunset Advisory Commission, these requirements would generate savings and revenues for the agency and its contractors to fund services for additional children and their families. Methodology According to ECI, consultant services would be needed to comply with the requirements of the bill to determine the cost-effectiveness of using the automated systems of TRC to plan, manage and maintain records of client services. It is assumed that 500 hours of consultant services are needed to review the cost-effectiveness of the council's use of the TRC systems. The fee for consultant services is estimated at $100 per hour ( 500 hours X $100 per hour = $50,000). According to the Sunset Advisory Commission (SAC), the selection of providers and renewal of provider contracts based on "best value", and the maximization of federal, private and local funding, could result in total savings estimated at $2,464,000 for each fiscal year, 2000-2004. Based on ECI's Contract Performance Measures for fiscal year 1998 report, the average cost per child was $6,617. Thirty-two of the agency's 70 contractors had total costs per child that were above the statewide average. It is assumed that if these providers were funded at no more than the statewide average through competitive procurement strategies, an additional $3.4 million would be available to fund services. SAC estimates that approximately $1,564,000 in savings could be realized from competitive procurement in each of fiscal years 2000 through 2004. According to SAC, maximizing Medicaid reimbursements for eligible ECI services could result in an additional $900,000 in each of the fiscal years 2000 and 2001. It is assumed that ECI Medicaid reimbursements to providers would increase by 10 percent each fiscal year. Total savings per fiscal year would be $2,464,000. It is assumed the savings would be from federal funds due to a federal grant award requirement that the State would maintain its level of effort in state spending. Local Government Impact No significant fiscal implication to units of local government is anticipated. Source Agencies: 532 Interagency Council on Early Childhood Intervention, 116 Sunset Advisory Commission, 530 Department of Protective and Regulatory Services, 529 Health and Human Services Commission, 301 Office of the Governor, 330 Rehabilitation Commission LBB Staff: JK, TP, RM