LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 76th Regular Session
March 30, 1999
TO: Honorable Judith Zaffirini, Chair, Senate Committee on
Human Services
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.), As
Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* SB1587, As Introduced: positive impact of $1,825,054 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 $(1,749,854) *
* 2001 3,574,908 *
* 2002 2,753,012 *
* 2003 2,209,000 *
* 2004 2,152,778 *
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All Funds, Five-Year Impact:
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*Fiscal Probable (Cost) Probable (Cost) Probable Probable *
* Year from General from Federal Savings from Savings from *
* Revenue Fund Funds General Revenue Federal Funds *
* 0001 0555 Fund 0555 *
* 0001 *
* 2000 $(1,749,854) $(1,749,854) $0 $0 *
* 2001 (2,189,562) (2,189,562) 5,764,470 9,153,930 *
* 2002 (1,530,000) (1,530,000) 4,283,012 6,801,388 *
* 2003 (1,530,000) (1,530,000) 3,739,000 5,937,500 *
* 2004 (1,530,000) (1,530,000) 3,682,778 5,848,222 *
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Technology Impact
The bill would require adaptations to the current System for Application,
Verfication, Eligibility, Referral and Reporting (SAVERR) at the
Department of Human Services. Because this system is not yet Year 2000
compliant, it is anticipated that adaptations to the SAVERR system will
not begin until the last quarter of fiscal year 2000. The bill would
require modifications to the current medical profile programs 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 cross matching
several databases (Workforce Commission, Department of Criminal Justice,
Internal Revenue Services, Worker's Compensation Commission and states
that border Texas). DHS would also be required to redesign the
Medicaid identification form and explore possible use of an electronic
benefits card for Medicaid services. The bill would require HHSC to
contact selected recipients by phone or visit individuals to confirm
receipt of Medicaid services. It would require TDH to contract for
professional services to test the Medicaid claims payment systems.
Methodology
Costs
1. Costs for information technology system adjustments will begin the
last quarter of fiscal year 2000; thus, savings from provisions of the
bill would not begin until fiscal year 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); phone and/or on-site verification of benefits by HHSC
($1.0 million annually); and testing of claims payments systems by TDH
($2.1 million 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.
2. Savings adjustments have been made in recognition of activities
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
hospital payments, physician payments, nursing homes, community care, and
the ICF-MR program. The new systems are anticipated to prevent
inappropriate payments and more readily access data for claim review and
audit.
3. The bill requirements related to priority of investigations for
potential fraudulent claims closely conform to current practices by the
HHSC's Office of Investigations and Enforcement. The OIE continues to
build new algorithms to detect fraudulent claiming activities and
patterns in the Medicaid program.
4. The savings relate to client services which would be shared 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: 304 Comptroller of Public Accounts, 320 Texas
Workforce Commission, 324 Department of Human
Services, 529 Health and Human Services
Commission, 696 Department of Criminal Justice,
501 Department of Health
LBB Staff: JK, TP, AZ