LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 76th Regular Session
May 13, 1999
TO: Honorable Jane Nelson, Chair, Senate Committee on Health
Services
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB2896 by Coleman (Relating to the administration and
operation of the state Medicaid program.), As Engrossed
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB2896, As Engrossed: negative impact of $(61,110,441) 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:
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* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2000 $(27,504,245) *
* 2001 (33,606,196) *
* 2002 (45,998,344) *
* 2003 (59,103,271) *
* 2004 (61,123,381) *
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All Funds, Five-Year Impact:
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*Fiscal Probable (Cost) from Probable (Cost) from Change in Number of *
* Year General Revenue Fund Federal Funds State Employees from *
* 0001 0555 FY 1999 *
* 2000 $(27,504,245) $(43,484,041) 1.0 *
* 2001 (33,606,196) (53,048,439) 1.0 *
* 2002 (45,998,344) (72,727,068) 1.0 *
* 2003 (59,103,271) (93,537,582) 1.0 *
* 2004 (61,123,381) (96,745,501) 1.0 *
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Fiscal Analysis
Provisions of the bill identified as having fiscal implications include:
1. Annual financial and performance audits of Medicaid contractors.
2. Moratorium on implementation of managed care pilot program during
fiscal year 2001 with requirement for HHSC to review and report on
various components of managed care pilot programs, premium rates and
other aspects of the managed care delivery system.
3. Requirement that Health and Human Services Commission (HHSC) not
discount managed care premium payment rates in an amount that is more
than the amount necessary to meet federal budget neutrality requirements
for projected fee-for-service costs unless certain conditions are met.
4. Establishment of a Medicaid managed care committee. Reimbursement
for travel and other committee related expenses would require authority
in the General Appropriations Act.
5. Requirement that monies received by the State as profit sharing be
deposited into the General Revenue Fund for the purpose of funding
Medicaid outreach and education activities.
Methodology
Health and Human Services Commission (HHSC) Costs:
1. It is assumed that one full-time equivalent position would be added
to coordinate the requirements of the bill. Estimates include travel,
initial office set-up and other operating costs.
2. It is assumed that HHSC would contract for professional services
related to reporting and evaluation requirements of the bill.
3. Approximately $50,000 of expenses are assumed related to the advisory
committee on managed care.
4. First year costs total $1.2 million with each subsequent year costing
$1.1 million. Costs would be equally shared by the state and federal
government.
Department of Health (TDH) Costs:
1. The bill would require that monies received by the State as profit
sharing be deposited into the General Revenue Fund for the purpose of
funding Medicaid outreach and education activites. Currently these
monies would be expended to support Medicaid client services costs. The
redirection of these monies is estimated to cost $0.8 million in General
Revenue Funds and $1.4 million in Federal Funds each year based upon the
State's experience in fiscal year 1997. NOTE: No cost estimates have
been included for additional clients that may become eligible as a result
of the outreach activities; thus, costs to implement this provision may
be understated.
2. The required moratorium on additional managed care sites in fiscal
year 2001 is anticipated to cost $2.9 million in General Revenue Funds
and $4.6 million in Federal Funds because it is assumed to stop the
scheduled managed care rollout in the Hill Country, Bell/McLennan
counties and Northwest Texas.
3. TDH estimates related to the requirement that the State not discount
managed care premium rates in an amount that is more than the amount
necessary to meet federal budget neutrality requirement for projected
fee-for-service costs total: $67.6 million in 2000; $75.9 million in
2001; $115.5 million in 2002; $149.4 million in 2003; $154.6 million in
2004. These costs are assumed to be shared with the federal government:
39 percent State and 61 percent Federal.
Local Government Impact
No significant fiscal implication to units of local government is
anticipated.
Source Agencies: 501 Department of Health, 529 Health and Human
Services Commission
LBB Staff: JK, TP, AZ