LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session April 5, 1999 TO: Honorable David Sibley, Chair, Senate Committee on Economic Development FROM: John Keel, Director, Legislative Budget Board IN RE: SB890 by Harris (Relating to the delegation of certain functions by health maintenance organizations.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * SB890, As Introduced: positive 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. * ************************************************************************** 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: *************************************************************************** *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 * *************************************************************************** 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