LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 76th Regular Session
April 30, 1999
TO: Honorable Patricia Gray, Chair, House Committee on Public
Health
FROM: John Keel, Director, Legislative Budget Board
IN RE: SB1587 by Zaffirini (relating to the detection of fraud,
waste, and abuse in the state Medicaid program),
Committee Report 2nd House, Substituted
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* SB1587, Committee Report 2nd House, Substituted: positive impact *
* of $6,789,065 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. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2000 $(609,854) *
* 2001 7,398,919 *
* 2002 13,886,707 *
* 2003 12,073,332 *
* 2004 11,885,928 *
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All Funds, Five-Year Impact:
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*Fiscal Probable (Cost) Probable Probable (Cost) Probable *
* Year from General Savings from from Federal Savings from *
* Revenue Fund General Revenue Funds Federal Funds *
* 0001 Fund 0555 0555 *
* 0001 *
* 2000 $(609,854) $0 $(609,854) $0 *
* 2001 (1,049,562) 8,448,481 (1,049,562) 13,416,119 *
* 2002 (390,000) 14,276,707 (390,000) 22,671,293 *
* 2003 (390,000) 12,463,332 (390,000) 19,791,668 *
* 2004 (390,000) 12,275,928 (390,000) 19,494,072 *
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Technology Impact
The bill would require adaptations to the current System for Application,
Verification, Eligibility, Referral and Reporting (SAVERR) at the
Department of Human Services. Because this system is not Year 2000
compliant, it is anticipated that adaptations to the SAVERR system will
begin in the last quarter of fiscal year 2000. The bill would require
modifications to the current medical profile and tape matches, as well
as require a redesign of the medical identification card. Total costs
related to the system changes are estimated to be $1.8 million (50
percent state).
Fiscal Analysis
The bill would require certain program changes at several agencies,
including the Department of Health (TDH), Department of Human Services
(DHS), and Health and Human Services Commission (HHSC). The bill would
require DHS to enhance its current efforts related to the periodic review
of eligibility status of Medicaid recipients by verification of state
and federal agencies' databases. DHS would also be required to redesign
the Medicaid identification form. The interagency task force on
electronic benefits would explore possible use of an electronic benefits
card for Medicaid services. The bill would provide authority for HHSC to
contact recipients by phone or visit individuals to confirm receipt of
Medicaid services.
Methodology
Costs
1. Costs for information technology system changes will begin in the
last quarter of fiscal year 2000; thus, savings from provisions of the
bill would not begin until the mid-year in 2001.
2. Contracted services will be required for one-time programming of the
SAVERR system and redesign of the Medicaid identification form by DHS
($1.8 million) and phone and/or on-site verification of benefits by HHSC
($780,000 annually).
3. Administrative costs are estimated to be shared equally (50 percent
state and 50 percent federal).
Savings
1. Savings estimates provided by the Comptroller of Public Accounts have
been adjusted to reflect the anticipated delay in automated system
adjustments. Savings would begin in the middle of fiscal year 2001.
Under current operations, if overpayments are identified by the National
Heritage Insurance Company on behalf of the Department of Health, the
State receives these refunds through premium credits and shares them with
the federal government.
2. A number of activities are currently underway by the affected
agencies which are anticipated to be operational prior to the new 2000-01
biennium. These include new claims payment systems (also referred to as
COMPASS 21) for Medicaid programs including payments for hospital,
physician, nursing homes, community care, and the ICF-MR program. The
new systems are expected to prevent inappropriate payments and more
readily access data for claims review and audit.
3. The Office of Investigation and Enforcement at HHSC continues to
build new algorithms to detect fraudulent claiming activities in the
Medicaid program.
4. The savings relate to client services payments which would be shared
according to the Federal Medical Assistance Percentage (FMAP) with the
federal government (39 percent state; 61 percent federal).
The State currently accepts eligibility determination by the federal
Social Security Administration for Supplemental Security Income (SSI)
eligible individuals as conferring Medicaid eligibility in Texas. It
may be necessary for the State to renegotiate or alter its current
arrangement with SSA in order to implement the provisions of the bill.
Local Government Impact
No significant fiscal implication to units of local government is
anticipated.
Source Agencies:
LBB Staff: JK, TP