LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session April 25, 2001 TO: Honorable Patricia Gray, Chair, House Committee on Public Health FROM: John Keel, Director, Legislative Budget Board IN RE: HB1221 by Maxey (Relating to protecting the privacy of medical records; providing penalties.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * HB1221, As Introduced: negative impact of $(33,371,687) 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 Net Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2002 $(18,326,032) * * 2003 (15,045,655) * * 2004 (8,838,869) * * 2005 (8,867,765) * * 2006 (8,879,107) * **************************************************** 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 State * * General GR Match Federal Local Employees * * Revenue for Funds - Institutio- from FY 2001 * * Fund Medicaid Federal nal Funds * * 0001 0758 0555 * * 2002 $(2,500) $(24,855) 228.0 * * $(18,323, $(13,622, * * 532) 352) * * 2003 (898) (1,046,499) 245.0 * * (15,044,757) (10,755,035) * * 2004 (8,838,117) (752) (940,729) (9,281,462) 246.1 * * 2005 (8,867,010) (755) (956,700) (9,197,912) 246.3 * * 2006 (8,878,350) (757) (972,995) (8,865,869) 246.3 * *********************************************************************** ***************************************************** * Fiscal Year Probable Revenue Gain/(Loss) from * * Local Institutional Funds * * 2002 $(80,000) * * 2003 (80,000) * * 2004 (80,000) * * 2005 (80,000) * * 2006 (80,000) * ***************************************************** Technology Impact Estimated technology impact for FYs 2002-06 would be $33.8 million for new or modified hardware, software, personal computers, printers, and programming, $22.7 million of which would occur in the 2002-03 biennium. Fiscal Analysis The bill defines information that must be protected. The bill would require covered entities, as defined in the bill, to meet various requirements related to the privacy of medical records such as allow patients to inspect or copy protected health information, allow patients to amend or append health records upon written request, maintain an "audit trail" system to track use and disclosure of protected medical information, and provide written notice of the entity's practices with respect to protected health information. The bill would require the Attorney General to appoint a lawyer to serve as the medical records privacy ombudsman, and lists eight specific duties of the ombudsman including the issuance of advisory opinions to governmental units about compliance with the chapter and the mediation of disputes relating to the release of protected health information. The bill would require the Ethics Commission to establish a privacy board for health research projects to review the effect of research protocol on patients' privacy rights. The bill also sets criteria and procedures the privacy board would use to grant a waiver of consent for use of protected health information. The privacy board would be required to provide documentation of the board's findings in regard to a waiver of consent on request to the Texas Ethics Commission, the Office of the Attorney General, the ombudsman, and the patient. The bill would also authorize the Office of Attorney General to seek injunctive relief and civil penalties for certain violations and set forth criminal penalties for each violation or a pattern or practice of violations. The bill would add professional and facility licensing sanctions for violations by covered entities subject to the provisions of the bill and repeal sections of the Education Code authorizing school officials to access student medical records. The bill would take effect September 1, 2002. Methodology Entities indicating costs would be incurred through implementation of the bill were Texas Tech University Health Sciences Center, the Health Care Information Council, the Department of Health, the University of Texas System, and Office of the Attorney General. According to these agencies, 228 FTEs in FY 2002, and 245 FTEs in FY 2003 would be needed to handle the additional workload that would be created by implementation of the bill. Estimated salary and benefits for the 2002-03 biennium would be $23,210,885. Other expenses for the 2002-03 biennium include $850,023 in medical administrative costs for WIC, and expenses for general startup and day-to-day operation. Local Government Impact No significant fiscal implication to units of local government is anticipated. Source Agencies: 364 Health Professions Council, 503 Texas State Board of Medical Examiners, 356 Texas Ethics Commission, 50B Texas Health Care Information Council, 739 Texas Tech University Health Sciences Center, 709 Texas A&M University System Health Science Center, 720 The University of Texas System, 763 UNT Health Science Center , 501 Texas Department of Health, 302 Office of the Attorney General LBB Staff: JK, HD, KF, RM