LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session March 29, 1999 TO: Honorable Judith Zaffirini, Chair, Senate Committee on Human Services FROM: John Keel, Director, Legislative Budget Board IN RE: SB1248 by Nelson (Relating to Medicaid third-party recoveries; providing a penalty.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * SB1248, As Introduced: positive impact of $5,403,300 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 $2,698,500 * * 2001 2,704,800 * * 2002 2,704,800 * * 2003 2,704,800 * * 2004 2,704,800 * **************************************************** All Funds, Five-Year Impact: *************************************************************************** *Fiscal Probable Savings/(Cost) from Probable Savings/(Cost) from * * Year General Revenue Fund Federal Funds * * 0001 0555 * * 2000 $2,698,500 $4,301,500 * * 2001 2,704,800 4,295,200 * * 2002 2,704,800 4,295,200 * * 2003 2,704,800 4,295,200 * * 2004 2,704,800 4,295,200 * *************************************************************************** Fiscal Analysis The bill would require additional information to be provided by health insurers to the Medicaid Third Party Reimbursement area. The bill would impose administrative penalties against insurers or plan administrators failing to provide the information within 180 days of the request. This bill would implement recommendation HHS 15 of the Texas Performance Review, "Challenging the Status Quo." Methodology The savings are estimated by the Comptroller of Public Accounts to be $7 million per year in All Funds, generated as follows: 1) Two pharmacy benefit managers have refused to comply with the current data matching statute. Assuming that these two entities comply with the bill's language, additional $3 million per year in recoveries would be achieved. 2) Additional third-party recoveries from participation in the Medicaid matching database and improved accuracy in data elements are assumed to total an additional $2 million per year. 3) An additional $2 million per year in cost avoidance is estimated to be generated due to the improved data. The Federal Medical Assistance Percentage (FMAP) assumed in the table above is 61.45 percent federal/38.55 percent state in fiscal year 2000 and 61.36 percent federal/38.64 percent state in 2001 and subsequent years. Local Government Impact No fiscal implication to units of local government is anticipated. Source Agencies: LBB Staff: JK, TP, KF