LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 76th Regular Session
March 28, 1999
TO: Honorable John Smithee, Chair, House Committee on
Insurance
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB3019 by Smithee (Relating to the delegation of certain
functions by health maintenance organizations.), As
Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB3019, As Introduced: 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. *
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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:
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*Fiscal Probable Savings/(Cost) from Change in Number of State *
* Year Texas Department of Insurance Employees from FY 1999 *
* Operating Account/ GR-Dedicated *
* 0036 *
* 2000 $(190,455) 3.5 *
* 2001 (158,415) 3.2 *
* 2002 (158,415) 3.2 *
* 2003 (158,415) 3.2 *
* 2004 (158,415) 3.2 *
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Fiscal Analysis
The bill would establish requirements for "delegation agreements" through
which HMOs may transfer responsibility for one or more of the functions
regulated under the HMO Act to a "delegated network." The bill would
require HMOs to file delegation agreements with the Texas Department of
Insurance (TDI) within 30 days of executing the agreement, and to include
certain information, including monitoring plans, to be included in
delegation agreements.
The bill would also require that TDI to assist HMOs in resolving problems
with delegated networks by:
requesting documentation, investigating deficiencies, auditing compliance
with a monitoring plan, suspending or revoking third party administrator
(TPA) or utilization review agent (URA) certificates, reporting audit
results to the network, requesting corrective action, monitoring
compliance with corrective action, and
ordering the HMO to take appropriate steps if the network fails to comply
with TDI's request for corrective action.
Methodology
TDI estimates the need for one additional FTE and associated operating
costs would be required to conduct additional examinations.
TDI also estimates the need for 2.5 additional FTEs and associated
operating costs in 2000 and 2.25 FTEs in 2001-2004, to review monitoring
agreements and to answer an estimated 1,100 complaints per year.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies:
LBB Staff: JK, TH, RT, DP