LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
  
                              March 5, 2001
  
  
          TO:  Honorable Patricia Gray, Chair, House Committee on Public
               Health
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB1591  by Kitchen (Relating to reporting and
               certification of Medicaid managed care encounter data.),
               As Introduced
  
**************************************************************************
*  No significant fiscal implication to the State is anticipated.        *
**************************************************************************
  
The bill would prohibit the use of encounter data to determine rates for
managed care premiums or other services, unless a certifier of encounter
data certifies that 1) the encounter data for the most recent state
fiscal year is complete, accurate, and reliable and 2) there is no
statistically significant variability in the encounter data attributable
to incompleteness, inaccuracy, or another deficiency as compared to
equivalent data for similar populations and when evaluated against
professionally accepted standards.

The current method used to set managed care premium rates in the Medicaid
program is to use historical fee for service data and discount those
averages by a certain percent.  It is not known whether the current
processes for collecting encounter data would result in data that would
meet the standards prescribed in this bill.  It is assumed that if the
data would not meet the standards prescribed in the bill, the Health and
Human Services Commission would continue to set rates for managed care
premiums and other services using the current methodology.

It is assumed that the costs identified by the Health and Human Services
Commission, relating to one Full-Time Equivalent to serve as a certifier
could be absorbed within existing resources at the Health and Human
Services Commission.
  
Local Government Impact
  
No fiscal implication to units of local government is anticipated.
  
  
Source Agencies:   529   Health and Human Services Commission
LBB Staff:         JK, HD, KF