LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 18, 2001
TO: Honorable Patricia Gray, Chair, House Committee on Public
Health
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB895 by Coleman (Relating to a demonstration project to
provide certain medications and related services through
the medical assistance program.), Committee Report 1st
House, Substituted
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB895, Committee Report 1st House, Substituted: positive impact *
* of $2,695,557 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. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $1,697,669 *
* 2003 997,888 *
* 2004 (1,647,352) *
* 2005 (4,580,964) *
* 2006 (7,736,170) *
****************************************************
All Funds, Five-Year Impact:
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*Fiscal Probable Probable Probable Change in *
* Year Savings/(Cost) Savings/(Cost) Savings/(Cost) Number of State *
* from General from GR Match from Federal Employees from *
* Revenue Fund for Medicaid Funds - Federal FY 2001 *
* 0001 0758 0555 *
* 2002 $19,609,900 $(17,912,231) $(27,093,375) 6.0 *
* 2003 39,219,799 (38,221,911) (57,524,359) 6.0 *
* 2004 39,219,799 (40,867,151) (61,479,833) 6.0 *
* 2005 39,219,799 (43,800,763) (65,893,109) 6.0 *
* 2006 39,219,799 (46,955,969) (70,639,747) 6.0 *
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Technology Impact
The Department of Mental Health and Mental Retardation (MHMR) would
require $3,306,500 in FY 2002, $2,767,500 in FY 2003, and $2,580,000 in
FYs 2004-06, for costs to develop and maintain an eligibility
determination system, as well as for costs to community centers to
develop a tracking system for copayments made by waiver participants.
The Department of Health (TDH) would require $71,500 per year for
claims processing fees performed by the National Heritage Insurance
Company.
Fiscal Analysis
The bill would require a Medicaid demonstration project (waiver) for a
period of seven years. The waiver would provide psychotropic
medications and related laboratory and medical services necessary to
conform to a prescribed medical regime for those medications. Eligible
persons would be those between the ages of 19 and 64, with incomes below
200% of the federal poverty level, and have been diagnosed with a mental
impairment, including schizophrenia or bipolar disorder, that is
expected to cause the person to become a disabled individual as defined
by federal law. The bill would provide for 12 month continuous
eligibility and appropriate enrollment limits. The bill would allow for
cost-sharing payments by participants.
Methodology
1. It is assumed no more than 21,000 total clients would be served in
the medications waiver. It is also assumed that benefits are limited to
those described in the waiver application to HCFA dated October 2000.
The average cost for services is assumed to be $3,821 per month, as found
in the waiver application. Estimates assume the inclusion of clients
with schizophrenia and bipolar disorders. Inclusion of clients with
other disorders could increase or decrease expenditures. The federal
share would total 60.20% in FY 2002, 60.08% in FY 2003, and 60.07% in
each subsequent year. Cost increase beyond the 2002-03 biennium are due
to the waiver assumptions of 9% annual inflation to drug costs and 3%
annual inflation to other costs (other medical, outreach and education).
2. General Revenue savings in the table above result from no longer
serving 12,697 clients in General Revenue funded programs at MHMR. It is
assumed these clients would be served in the new waiver program.
3. MHMR would need an additional six FTEs at an average cost of $64,166.
Average costs include salaries, benefits, and operating expenses.
4. There is an assumption of a six month phase-in period for FY 2002.
5. The potential increase in revenue related to copayments made by
waiver participants has not been estimated at this time due to the
absence of detailed assumptions regarding prescription usage.
6. Costs to MHMR community centers are included at $50,000 per center
(42 centers) for development of a tracking system for copayments made by
waiver participants.
7. The Department of Human Services (DHS) assumes eligibility
determination would be conducted through the use of existing and new
resources at MHMR and local entities, therefore, no costs have been
assumed related to DHS, but included in MHMR's cost estimate are
one-time and ongoing expenditures to develop and maintain an
eligibility, billing and payment mechanism.
Local Government Impact
Local community centers funding for copayment tracking systems are
included in estimates above.
Source Agencies: 529 Health and Human Services Commission, 324
Texas Department of Human Services, 501 Texas
Department of Health
LBB Staff: JK, HD, KF, MB