LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session May 10, 1999 TO: Honorable John Smithee, Chair, House Committee on Insurance FROM: John Keel, Director, Legislative Budget Board IN RE: SB1468 by Harris (Relating to the regulation of physician joint negotiation.), As Engrossed ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * SB1468, As Engrossed: 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 Probable Revenue Change in Number of * * Year Savings/(Cost) from Gain/(Loss) from State Employees from * * General Revenue Fund General Revenue Fund FY 1999 * * 0001 0001 * * 2000 $(418,212) $418,212 6.0 * * 2001 (383,141) 383,141 6.0 * * 2002 (383,141) 383,141 6.0 * * 2003 (383,141) 383,141 6.0 * * 2004 (383,141) 383,141 6.0 * ************************************************************************** Fiscal Analysis The bill would add Chapter 29 to the Insurance Code providing for collective negotiation by competing physicians of certain terms and conditions of contracts with certain health benefit plans. Prior to engaging in negotiations, a person or organization representing physicians would be required to file a plan of operation, including the procedures to be used to ensure compliance with this section, with the Office of the Attorney General (OAG). The OAG would also be required to receive reports of all negotiations between physicians and health plans and to review them for compliance within thirty days of filing. The bill would also authorize the OAG to collect reasonable fees from physician representatives to cover the cost of administering this program. Methodology The Texas Department of Insurance (TDI) estimates administration of this program would require an additional six FTEs and associated operating costs to review documents associated with 292 negotiations per year, and to open an estimated thirty additional enforcement cases per year. TDI also estimates the need for additional consultant contracts in 2000 associated with the first year of the program. Revenues are estimated to allow the OAG to recover all costs associated with this program. Local Government Impact No fiscal implication to units of local government is anticipated. Source Agencies: LBB Staff: JK, TH, RT, DP