LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
Revision 1
April 3, 2001
TO: Honorable Patricia Gray, Chair, House Committee on Public
Health
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB1615 by Maxey (Relating to the regulation and
reimbursement of telemedicine medical services.),
Committee Report 1st House, Substituted
**************************************************************************
* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB1615, Committee Report 1st House, Substituted: negative impact *
* of $(3,174,374) 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 $(1,404,127) *
* 2003 (1,770,247) *
* 2004 (1,839,168) *
* 2005 (1,854,371) *
* 2006 (1,855,638) *
****************************************************
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 *
* GR Match Tobacco Federal Telecommun- Employees *
* for Settlement Funds - ications from FY 2001 *
* Medicaid Receipts Federal Infrastruc- *
* 0758 5040 0555 ture Fund *
* 0345 *
* 2002 $(129,076) $(54,317) 3.0 *
* $(1,275,051) $(2,187,534) *
* 2003 (1,505,133) (265,114) (2,826,422) (42,317) 3.0 *
* 2004 (1,574,054) (265,114) (2,926,885) (42,317) 3.0 *
* 2005 (1,589,257) (265,114) (2,948,825) (42,317) 3.0 *
* 2006 (1,590,524) (265,114) (2,950,092) (42,317) 3.0 *
***********************************************************************
Fiscal Analysis
The bill would amend current telemedicine statutes. Section 1 would
require the Health and Human Services Commission (HHSC) to require by
rule that all state Medicaid-operating agencies provide Medicaid
reimbursement for telemedicine services. Restrictions related to the
type of facility that may participate would be removed. The limitation
regarding rural physicians would also be removed. The HHSC would be
responsible for monitoring and regulating the use of telemedicine
services, in consultation with the Board of Medical Examiners. Section 4
directs health care providers for the Children's Health Insurance
Program (CHIP) to provide telemedicine services. Sections 13-16 would
require the Telecommunications Infrastructure Fund Board (TIFB) to
establish an assistance program to provide education and facilitate
access to funds.
Section 1 of the bill would require HHSC to establish "telehealth" pilot
programs. It is assumed pilots would be established for both the
Medicaid and CHIP programs.
Methodology
Provision of Telemedicine Services to Medicaid Recipients
The following estimate relates only to services to be provided through
the Department of Health (TDH). Potentially, the bill could require
additional services be funded at the Department of Human Services (DHS)
and other agencies. If additional Medicaid-operating agencies were
affected, additional costs would result.
TDH estimates the bill would impact the Medicaid program in the following
ways. The number of services (echography and retina scans) would
increase by 28,168 services per year at an average per service cost of
$91.47. TDH estimates the bill would increase the number of
participating providers, thereby increasing the number of consultations
by 220 in FY 2002, 3,696 in FY 2003, 7,984 in FY 2004, 8,880 in FY 2005,
and 8,880 in FY 2006. The estimated average cost per consultation is
$37.34. The federal share of client services expenses would total 60.20%
in FY 2002, 60.08% in FY 2003, and 60.07% in each subsequent year. TDH
also estimates additional administrative costs related to enrollment and
claims payment totaling $43,152 in FY 2002, $50,379 in FY 2003, $59,664
in FY 2004, $63,354 in FY 2005, and $65,888 in FY 2006. Administrative
expenses would be shared equally by the federal government and the State.
Provision of Telemedicine Services to CHIP Recipients
HHSC estimates no net cost to the CHIP program related to the required
provision of telemedicine services.
Monitoring and Regulation of Telemedicine Providers/Services
HHSC estimates two FTEs would be required. Annual salaries would total
37,322 and 19,452 respectively. Fringe benefits would total 28.28% of
salary. One-time set up costs totaling $12,000 per FTE are assumed for
FY 2002. These expenses would be shared equally by the federal
government and the State.
Development and Administration of an Assistance Program
It is estimated the TIFB would require one additional FTE, with an annual
salary of 32,988 per year. Fringe benefits would total 28.28% of
salary. One-time set up costs totaling $12,000 are assumed for FY 2002.
Expenses would be funded through the Telecommunication Infrastructure
Fund (345). While the bill would implement a new education and grant
program, TIFB assumes no increase in funding would be required. However,
the agency indicates the average grant award may need to be reduced or
the number of grants may need to be reduced.
Telehealth Pilot--Medicaid and CHIP
It is assumed federal approval would allow for March 2002 implementation.
It is assumed 600 TDH clients per month per year would receive
telemedicine services. Telemedicine services would cost $110 per month
and include the following: education by video, education by a health
professional, and supplemental consultations. The federal share of
client services expenses would total 60.20% in FY 2002, 60.08% in FY
2003, and 60.07% in each subsequent year. A contract related to
collection and analysis of data, including an assessment of client
satisfaction, would total $37,500 in FY 2002 and $87,500 for each
subsequent year. This expense would be shared equally by the federal
government and the State.
The same client and cost assumptions would apply to the CHIP program.
However, the federal match for client services would total 72.14% in FY
2002, and 72.05% in each subsequent year.
Local Government Impact
No significant fiscal implication to units of local government is
anticipated.
Source Agencies: 324 Texas Department of Human Services, 367
Telecommunications Infrastructure Fund Board, 501
Texas Department of Health, 503 Texas State Board
of Medical Examiners, 529 Health and Human
Services Commission
LBB Staff: JK, HD, PP