LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 76th Regular Session
March 16, 1999
TO: Honorable Kim Brimer, Chair, House Committee on Business
& Industry
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB2545 by Brimer (Relating to workers' compensation
medical benefits, claims regarding those benefits, and
requirements imposed on health care providers who
provide services relating to those benefits), As
Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB2545, As Introduced: negative impact of $(1,234,845) 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 $(645,830) *
* 2001 (589,015) *
* 2002 (589,015) *
* 2003 (589,015) *
* 2004 (589,015) *
****************************************************
All Funds, Five-Year Impact:
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*Fiscal Probable Probable Revenue Change in Number of *
* Year Savings/(Cost) from Gain/(Loss) from State Employees from *
* General Revenue Fund General Revenue Fund FY 1999 *
* 0001 0001 *
* 2000 $(2,020,637) $1,374,807 6.0 *
* 2001 (1,963,822) 1,374,807 6.0 *
* 2002 (1,963,822) 1,374,807 6.0 *
* 2003 (1,963,822) 1,374,807 6.0 *
* 2004 (1,963,822) 1,374,807 6.0 *
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Fiscal Analysis
The bill would require the Texas Workers' Compensation Commission (TWCC)
to review injured workers' requests for a change in treating doctor in
the event that the insurance company did not agree to such a request.
TWCC would be required to determine whether the change was medically
warranted, and before denying such a request, would be required to
consider whether an independent medical consultation was necessary.
The bill would require that workers compensation insurance carriers pay
medical claims within 20 days, and that the carrier pay interest on any
claims that are not paid within 20 days. These provisions would apply
to the State Office of Risk Management, which administers workers
compensation payments for state employees.
Methodology
In 1998, TWCC processed approximately 27,000 requests to select an
alternate treating doctor. Of these, approximately 14,000 were approved,
5,000 were approved with exceptions, and 8,000 were denied. TWCC
estimates that three additional staff persons with medical expertise
could determine whether such requests for physician change are medically
warranted.
It is estimated that 8,000 denials would require independent medical
consultations. The agency estimates that such reviews would cost
approximately $150 each, based on the cost of other medical reviews
conducted for workers' compensation. It is assumed that all costs would
be offset by additional revenue from the Workers' Compensation
Maintenance Tax.
The State Office of Risk Management estimates that 3 additional agency
employees would be required to meet the claims payment deadlines in the
bill, at a first year cost of $116,330 and an ongoing cost of $99,015.
Additionally, the cost of the agency's contract for medical bill review
and cost containment services would increase by an estimated $490,000
per year, due to the need for a larger number of contractor employees to
review the bills in the time required. The agency also estimates a
one-time cost of $39,500 for reprogramming the claims management
computer system to calculate interest.
Local Government Impact
No significant fiscal implication to units of local government is
anticipated.
Source Agencies:
LBB Staff: JK, TH, CB, SC