LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session April 18, 1999 TO: Honorable Judith Zaffirini, Chair, Senate 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.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * SB369, As Introduced: negative impact of $(7,385,145) 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 $(3,662,958) * * 2001 (3,722,187) * * 2002 (3,849,894) * * 2003 (3,985,265) * * 2004 (4,128,757) * **************************************************** All Funds, Five-Year Impact: *************************************************************************** *Fiscal Probable Probable Probable Probable * * Year Revenue Savings/(Cost) Savings/(Cost) Savings/(Cost) * * Gain/(Loss) from General from General from General * * from General Revenue Fund Revenue Fund ( Revenue Fund * * Revenue Fund 0001 Medicaid Match) (Medicaid * * 0001 0001 Match) * * 0001 * * 2000 $16,500 $(688,431) $(3,248,772) $257,745 * * 2001 16,500 (475,200) (3,521,232) 257,745 * * 2002 16,500 (490,385) (3,633,754) 257,745 * * 2003 16,500 (506,482) (3,753,028) 257,745 * * 2004 16,500 (523,544) (3,879,458) 257,745 * *************************************************************************** *************************************************************************** *Fiscal Probable Savings/(Cost) from Probable Savings/(Cost) from * * Year Federal Funds (Medicaid) Federal Funds (Medicaid) * * 0555 0555 * * 2000 $(5,081,413) $403,140 * * 2001 (5,507,568) 403,140 * * 2002 (5,683,564) 403,140 * * 2003 (5,870,121) 403,140 * * 2004 (6,067,870) 403,140 * *************************************************************************** Technology Impact The bill would require programming changes on automation systems at the Department of Human Services (DHS) and the Texas Education Agency (TEA). It is assumed these costs could be absorbed within existing resources, with the exception of revisions to the Child Nutrition Program Information Management System. TEA estimates this effort would require a one-time appropriation of $250,000 General Revenue. Fiscal Analysis The bill would continue the existence of DHS until August 31, 2007, make numerous changes in agency operations, transfer contested case hearings to the State Office of Administrative Hearings, and transfer several nutrition programs to TEA. All transfers including funding and FTE positions are assumed to have no net fiscal impact unless otherwise noted below. Section 10 of 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. Section 12 would require DHS to perform presumptive eligibility for certain community care programs, resulting in increased enrollment in the Frail Elderly program and the Community-based Alternatives (CBA) 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. Note: Increased enrollment in the Frail Elderly and CBA programs would require additional expenditures for acute care and/or prescription drugs at the Department of Health. These costs have not been included in this fiscal estimate. With further analysis, these costs will be added. Section 12 would require DHS to assess the needs of persons placed on a waiting list for community care services. This would increase workload, as the department does not currently perform this activity. However, it is assumed the level of assessment would be minimal and therefore the department could perform the new responsibility using existing resources. If persons with higher levels of need are given priority for services, the average cost per person for affected programs would likely increase. Sections 22 and 24 would increase licensing fees, resulting in increased revenue of $16,500 per year. Section 27 would transfer the Summer Food Program to TEA, resulting in a one-time additional cost of $250,000 General Revenue, according to TEA. Methodology It is estimated implementation of presumptive eligibility (Section 12) 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-five 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 5 percent of additional clients would not qualify for Medicaid; their benefits would be paid with unmatched General Revenue. Presumptive eligibility would increase enrollment in the CBA program by 1.7 percent over the otherwise anticipated caseload. Therefore enrollment would increase by 361 clients in fiscal year 2000 and in each subsequent year. Ninety-five percent of additional clients would qualify for Medicaid benefits, but 5 percent would not. As a partial offset to these costs, it is assumed that 8 percent of the additional clients in CBA would have been diverted from nursing facility care, which is estimated to cost $22,896 per client per year. Therefore, presumptive eligibility would reduce enrollment in nursing facilities by 29 clients in fiscal year 2000 and in each subsequent year, resulting in an annual savings of $660,885 each year. Section 24: Change in License Renewal Fees for Nursing Facility Administrators The bill would increase fees for approximately 112 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: 308 State Auditor's Office, 301 Office of the Governor, 530 Department of Protective and Regulatory Services, 360 State Office of Administrative Hearings, 324 Department of Human Services, 116 Sunset Advisory Commission, 701 Texas Education Agency - Administration LBB Staff: JK, TH