LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session March 29, 1999 TO: Honorable Jane Nelson, Chair, Senate Committee on Health Services FROM: John Keel, Director, Legislative Budget Board IN RE: SB1249 by Nelson (Relating to the regulation of ambulatory surgical centers; providing a penalty.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * SB1249, As Introduced: positive impact of $111,486 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 $3,548 * * 2001 107,938 * * 2002 141,120 * * 2003 156,120 * * 2004 171,120 * **************************************************** All Funds, Five-Year Impact: *************************************************************************** *Fiscal Probable Probable Probable Change in * * Year Savings/(Cost) Revenue Revenue Number of State * * from General Gain/(Loss) Gain/(Loss) Employees from * * Revenue Fund from General from New - GR FY 1999 * * 0001 Revenue Fund Dedicated * * 0001 Account - * * Ambulatory * * Surgical Center * * Penalty * * 2000 $(71,452) $75,000 $11,250 2.2 * * 2001 (207,062) 315,000 12,375 2.7 * * 2002 (188,880) 330,000 13,613 2.7 * * 2003 (188,880) 345,000 14,974 2.7 * * 2004 (188,880) 360,000 16,471 2.7 * *************************************************************************** Fiscal Analysis The bill relates to the regulation of ambulatory surgical centers and provides a penalty. The bill would authorize the Department of Health to conduct an on-site licensing inspection of a ambulatory surgical center every three years. The bill would allow the Department of Health to issue an emergency order to suspend the license of an ambulatory surgical center if the department believes the license holder's conduct endangers the public health and safety; and to assess an administrative penalty. The provisions of the bill would provide a hearing process and require that civil and administrative penalties collected be deposited in the state treasury to the credit of a new General Revenue Dedicated Account - Ambulatory Surgical Center Penalty. The bill would allow the department to assess expenses and costs against the license holder found in violation for an amount based on considerations described in the bill. If payment of the expenses and costs assessed does not occur within the time specified in the bill, the department may refer the matter to the attorney general for collection. Methodology The Department of Health estimates the annual licensing fee would be increased by $1,500 to a cost of $2,500 per license to cover increased cost. According to the department, the annual growth rate in the number of ambulatory surgical centers is five percent. The estimated total generated in annual licensing fees for fiscal years 2000-2004 would be $1,425,500. According to the Department of Health, approximately one-third of the cases recommended for enforcement go through the hearing process, with the remaining cases resolved through other means. TDH estimates a baseline of five incidents in fiscal year 2000 at a rate of $3,000 per incident. According to the department, the annual growth in the number of incidents is 10 percent and collection rate is 75 percent each fiscal year, 2000-2004. The estimated total generated in administrative penalties collected and deposited in the state treasury to the credit of the general revenue fund for the same period would be $68,682. On-site licensing inspection of ambulatory surgical centers would be allowed under the provisions of the bill. The Department of Health estimates that it would need 2.2 additional FTEs in fiscal year 2000 and 2.7 FTEs in fiscal years 2001-2004 to administer the survey process; conduct on-site licensing inspections and quality assurance review of survey documents; and provide administrative support. According to the Office of Court Administration, any increase in workload resulting from the provisions of the bill would be offset by the collection of penalties, costs and expenses. Local Government Impact No significant fiscal implication to units of local government is anticipated. Source Agencies: LBB Staff: JK, TP, RM