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 ************************************************************************** * 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. * ************************************************************************** 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: ************************************************************************** *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 * ************************************************************************** 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