LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
March 6, 2001
TO: Honorable Patricia Gray, Chair, House Committee on Public
Health
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB827 by Gray (Relating to simplifying the application
and eligibility determination process for medical
assistance provided to children.), As Introduced
**************************************************************************
* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB827, As Introduced: negative impact of $(74,992,474) through *
* the biennium ending August 31, 2003. *
* *
* 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 *
* 2002 $(17,320,107) *
* 2003 (57,672,367) *
* 2004 (73,704,134) *
* 2005 (79,880,568) *
* 2006 (82,722,097) *
****************************************************
All Funds, Five-Year Impact:
***********************************************************************
*Fiscal Probable Probable Probable Probable Change in *
* Year Savings/ Savings/ Savings/ Savings/ Number of *
* (Cost) from (Cost) from (Cost) from (Cost) from DHS *
* GR Match GR Match Federal Federal Employees *
* for for Funds - Funds - from FY 2001 *
* Medicaid Medicaid Federal Federal *
* 0758 0758 0555 0555 *
* 2002 $4,072,106 $4,072,106 (184.0) *
* $(21,392, $(31,724, *
* 213) 103) *
* 2003 5,705,743 5,705,743 (257.0) *
* (63,378,110) (94,510,865) *
* 2004 5,971,177 5,971,177 (270.0) *
* (79,675,311) (118,948, *
* 816) *
* 2005 6,251,166 6,251,166 (282.0) *
* (86,131,734) (128,618, *
* 922) *
* 2006 6,545,602 6,545,602 (296.0) *
* (89,267,699) (133,291, *
* 576) *
***********************************************************************
Fiscal Analysis
The bill would modify the Medicaid application and recertification
processes for children under the age of 19 to make them comparable to
those of the Children's Health Insurance Program (CHIP). Specific
changes include: eliminating the face-to-face interview at application
(Section 1 (e)) and recertification (Section 2 (e)); and simplifying
documentation and verification (Section 2 (d)). The bill would take
effect September 1, 2001.
Methodology
General Assumptions
Both policy changes would impact the Department of Health (TDH), the
Department of Human Services (DHS), and the Employees Retirement System
(ERS). It is assumed that funding would be realigned among state agencies
as needed, with implementation occurring January 2002. No costs related
to automation are assumed. Medicaid services provided by TDH would
include premiums (weighted for fee for service and managed care),
prescriptions, dental, physician, hospital, laboratory and other
services. Client costs would remain at the estimated FY 2001 level, with
no adjustment for inflation or change in service utilization. (Average
costs do vary according to the mixture of client risk groups.) The
federal share of total client services expenses would be 60.20% in FY
2002, 60.08% in FY 2003, and 60.07% in subsequent years. To account for
potential overlap in clients, estimates for Eliminating the Face-to-Face
Interview and Simplifying Documentation and Verification have been
reduced by 10%. Annual savings/costs per eligibility-related FTE at DHS
would total approximately $30,850. Of this amount, 19% is for employee
benefits funded at ERS. The federal share of FTE expenses would be 50%
of the total.
Eliminating the Face-to-Face Interview
Recipient months per month would increase by 9,176 in FY 2002, 27,734 in
FY 2003, 34,695 in FY 2004, 37,254 in FY 2005, and 38,193 in FY 2006.
Monthly client services costs would total $138.67 each fiscal year. A
reduction in application processing time would result in a net FTE
reduction totaling 263.7 in FY 2002, 369.9 in FY 2003, 387.0 in FY 2004,
405.0 in FY 2005, and 424.8 in FY 2006.
Simplifying Documentation and Verification
Recipient months per month would increase by 20,617 in FY 2002, 63,202 in
FY 2003, 80,357 in FY 2004, 87,339 in FY 2005, and 91,216 in FY 2006.
Monthly client services costs would range from $142.99 in FY 2002 to
$141.64 in FY 2006. An increase in the number of eligible cases would
offset a reduction in application processing time, resulting in a net
FTE increase totaling 80.1 in FY 2002, 112.5 in FY 2003, 117.0 in FY
2004, 123.3 in FY 2005, and 128.7 in FY 2006.
Local Government Impact
No significant fiscal implication to units of local government is
anticipated.
Source Agencies: 529 Health and Human Services Commission, 304
Comptroller of Public Accounts, 324 Texas
Department of Human Services, 501 Texas Department
of Health
LBB Staff: JK, HD, PP, SW