LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session May 22, 1999 TO: Honorable Elliott Naishtat, Chair, House Committee on Human Services FROM: John Keel, Director, Legislative Budget Board IN RE: SB369 by Zaffirini (Relating to the continuation and functions of the Texas Department of Human Services), Committee Report 2nd House, Substituted ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * SB369, Committee Report 2nd House, Substituted: negative impact * * of $(4,360,043) 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 $(2,007,964) * * 2001 (2,352,079) * * 2002 (2,494,194) * * 2003 (2,644,835) * * 2004 (2,804,515) * **************************************************** All Funds, Five-Year Impact: *************************************************************************** *Fiscal Probable Probable (Cost) Probable (Cost) Probable (Cost) * * Year Revenue Gain to to General to General to Federal * * General Revenue Revenue Fund Revenue Fund Funds * * Fund 0001 (Medicaid (Medicaid) * * 0001 Match) 0555 * * 0001 * * 2000 $16,500 $(86,527) $(1,937,937) $(3,031,133) * * 2001 16,500 (101,235) (2,267,344) (3,546,359) * * 2002 16,500 (107,309) (2,403,385) (3,759,140) * * 2003 16,500 (113,747) (2,547,588) (3,984,689) * * 2004 16,500 (120,572) (2,700,443) (4,223,770) * *************************************************************************** Technology Impact The bill would require programming changes to information systems at the Department of Human Services (DHS). It is assumed these costs could be absorbed within existing resources. Fiscal Analysis The bill would continue the existence of DHS until August 31, 2011, make numerous changes in agency operations, and transfer contested case hearings to the State Office of Administrative Hearings. All changes, including funding and FTE position transfers, are assumed to have no net fiscal impact unless otherwise noted below. The bill would require DHS to assist a recipient of financial assistance to assess the needs of the recipient and those of the recipient's family that, if addressed, would help the recipient and the recipient's family attain and retain independence, and to refer the recipient and the recipient's family to appropriate preventative and support services. It is assumed that assistance and referral services provided by DHS would be limited in scope and duration. Consequently, the department could comply with the provision without requiring additional resources. The bill would require DHS to perform presumptive eligibility for certain community care programs, resulting in increased enrollment in the Frail Elderly program. Most of the increased cost would be paid with Medicaid funding. However, a portion of the additional clients would be determined (subsequent to enrollment) to be ineligible for Medicaid. It is assumed the department would continue to provide benefits for these clients using General Revenue alone. Increased enrollment in the Frail Elderly program would require additional expenditures for acute care at the Department of Health. These costs have been included in this fiscal estimate. The bill would increase licensing fees, resulting in increased revenue of $16,500 per year. Methodology It is estimated implementation of presumptive eligibility would increase enrollment in the Frail Elderly program by 2.6 percent over the otherwise anticipated caseload. Therefore, enrollment would increase by 721 clients in fiscal year 2000, 844 in 2001, 894 in 2002, 948 in 2003, and 1,005 in 2001. The average annual cost per client is estimated to be $6,000. Ninety-eight percent of additional clients would qualify for Medicaid benefits (paid with approximately 39 percent General Revenue, and 61 percent matching Federal Funds). It is estimated the remaining 2 percent of additional clients would not qualify for Medicaid; their benefits would be paid with unmatched General Revenue. The additional number of Medicaid Frail Elderly clients would require increased expenditures for acute care costs at the Department of Health (TDH). The average monthly cost to TDH (including premium and transportation) per client would total $86, resulting in an annual cost of $729,249 in fiscal year 2000, $853,206 in 2001, $904,398 in 2002, $958,662 in 2003, and $1,016,181 in 2004. Benefits would be paid with approximately 39 percent General Revenue, and 61 percent matching Federal Funds. The bill would increase fees for approximately 112 nursing facility administrators who renew their licenses within 90 days after expiration by $50 resulting in an increased revenue of $5,600 per year. The bill would increase fees for approximately 109 administrators who renew their licenses after more than 90 days, but not longer than 1 year after expiration, by $100--resulting in an increased revenue of $10,900 per year. Local Government Impact No significant fiscal implication to units of local government is anticipated. Source Agencies: 324 Department of Human Services LBB Staff: JK, TP, PP