LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
March 14, 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.), As
Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB1615, As Introduced: negative impact of $(34,849,910) 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 $(11,468,725) *
* 2003 (23,381,185) *
* 2004 (23,732,438) *
* 2005 (24,130,848) *
* 2006 (23,773,689) *
****************************************************
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 GR Match from Federal from Employees from *
* for Medicaid Funds - Federal Telecommunicat- FY 2001 *
* 0758 0555 ions *
* Infrastructure *
* Fund *
* 0345 *
* 2002 $(11,468,725) $(17,312,740) $(54,317) 3.0 *
* 2003 (23,381,185) (351,260,551) (42,317) 3.0 *
* 2004 (23,732,438) (35,663,172) (42,317) 3.0 *
* 2005 (24,130,848) (36,262,533) (42,317) 3.0 *
* 2006 (23,773,689) (35,747,296) (42,317) 3.0 *
***************************************************************************
Fiscal Analysis
The bill would amend current telemedicine statutes. Section 3 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. HHSC would also
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. Section 13 would require
the Telecommunications Infrastructure Fund Board (TIFB) to establish an
assistance program to provide education and facilitate access to funds.
Section 5 of the bill would require the Department of Health (TDH) to
establish a Home Telemedicine Pilot Program under which certain Medicaid
recipients with a chronic illness would receive home health services
through telemedicine in addition to other home health care services for
which the recipients are eligible. Under the pilot, the agency could
provide a participant with the following home health telemedicine
services: education regarding self-care and preventive health,
monitoring for compliance with medication requirements, monitoring vital
signs, counseling and social support, and other services.
Additionally, the bill would require the agency to provide:
telemedicine equipment (other than a telephone line and telephone) that
is necessary for receipt of home health care telemedicine services at no
cost to the recipient for the duration of services, personal training
and written instructions in the use and maintenance of telemedicine
equipment, frequent monitoring regarding the quality of services and a
participant's satisfaction with services, and a report to the
Legislature regarding the program December 1, 2004. The bill would take
effect September 1, 2001 and expire September 1, 2005.
Methodology
Provision of Telemedicine Services to Medicaid Recipients
The following estimate relates only to services to be provided through
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.
It is assumed 25% of the total Medicaid population served by TDH would
receive telemedicine services. The average number of recipients per year
would total 462,452 in FY 2002, 470486 in FY 2003, 478,658 in FY 2004,
and 486973 in FY 2005, and 495432 in FY 2006. Each client would receive
two telemedicine services in FY 2002 (to allow for a March 2002
implementation) and four telemedicine services per year for each
subsequent year. The per service cost would total $30. 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.
Provision of Telemedicine Services to CHIP Recipients
The HHSC has not estimated an increased cost to the CHIP program related
to the required provision of telemedicine services. However, as with the
Medicaid program, providing telemedicine services in the CHIP program
could require an additional General Revenue appropriation.
Monitoring and Regulation of Telemedicine Providers/Services
The 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. This expense 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 has assumed that no increase in funded is required.
However, the agency indicates the average grant award may need to be
reduced or the number of grants may need to be reduced.
Home Telemedicine Pilot Program
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 $250 per month
and include the following: education by video, education by a health
professional, counseling related to depression, monitoring of medication
compliance and vital signs, and supplemental consultations. 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. 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. This expense would be shared equally by the federal government and
the State.
Additional costs could result from the provision of telemedicine
equipment. However, these costs have not been estimated. Likewise,
potential improvements in the health status of waiver participants and
an associated savings in traditional health care costs have not been
estimated. It is assumed the pilot applies only to TDH. If additional
Medicaid-operating agencies were affected, additional costs would
result.
Local Government Impact
No significant fiscal implication to units of local government is
anticipated.
Source Agencies: 503 Texas State Board of Medical Examiners, 367
Telecommunications Infrastructure Fund Board, 529
Health and Human Services Commission, 324 Texas
Department of Human Services, 720 The University
of Texas System, 304 Comptroller of Public
Accounts, 501 Texas Department of Health
LBB Staff: JK, HD, PP