LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session March 1, 1999 TO: Honorable Judith Zaffirini, Chair, Senate Committee on Human Services FROM: John Keel, Director, Legislative Budget Board IN RE: SB11 by Zaffirini (Relating to the mental state applicable to certain violations under the state Medicaid program.), As Introduced ************************************************************************** * Estimated Two-Year Net Impact to General Revenue Related Funds for * * SB11, As Introduced: positive impact of $2,600,000 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 $1,300,000 * * 2001 1,300,000 * * 2002 1,300,000 * * 2003 1,300,000 * * 2004 1,300,000 * **************************************************** All Funds, Five-Year Impact: ***************************************************** * Fiscal Year Probable Revenue Gain/(Loss) from * * General Revenue Fund * * 0001 * * 2000 $1,300,000 * * 2001 1,300,000 * * 2002 1,300,000 * * 2003 1,300,000 * * 2004 1,300,000 * ***************************************************** Fiscal Analysis It is assumed that the provisions of the bill would increase the ability for the Health and Human Services Commission's Office of Investigations and Enforcement to impose appropriate fiscal sanctions when the Medicaid provider violations are serious enough to warrant exclusion plus imposition of damages and penalties. Methodology Based upon the amount of recouped overpayments in fiscal year 1998, the Health and Human Services Commission estimates that an additional 15 to 25 percent of those recoupments would have met the lesser standard of proof established in the bill. It is estimated that between $1.3 million and $2.2 million in penalties would have been assessed in fiscal year 1998 based upon $8.8 million in overpayments. Imposed penalties are comprised of fines up to $2,000 per erroneous line item and up to doubling the amount of the overpayment. For the purposes of the fiscal estimate, the lower amount of penalty collections is assumed. Local Government Impact No significant fiscal implication to units of local government is anticipated. However, to the extent local entities which are Medicaid providers, such as hospital districts or health clinics, submit fraudulent claims, penalties would be imposed in the same manner as private providers. Source Agencies: LBB Staff: JK, TP, AZ