LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
May 2, 2001
TO: Honorable David Sibley, Chair, Senate Committee on
Business & Commerce
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB1862 by Eiland (Relating to the regulation and prompt
payment of health care providers under certain health
benefit plans.), As Engrossed
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB1862, As Engrossed: positive impact of $0 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 $0 *
* 2003 0 *
* 2004 0 *
* 2005 0 *
* 2006 0 *
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All Funds, Five-Year Impact:
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*Fiscal Probable Probable Revenue Change in Number of *
* Year Savings/(Cost) from Gain/(Loss) from State Employees from *
* Texas Department of Texas Department of FY 2001 *
* Insurance Operating Insurance Operating *
* Fund Account/ Fund Account/ *
* GR-Dedicated GR-Dedicated *
* 0036 0036 *
* 2002 $(161,560) $161,560 3.0 *
* 2003 (146,025) 146,025 3.0 *
* 2004 (146,025) 146,025 3.0 *
* 2005 (146,025) 146,025 3.0 *
* 2006 (146,025) 146,025 3.0 *
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Technology Impact
Computer hardware and software would be needed for the additional three
Full-time Equivalent positions (FTEs) totaling $8,097 in fiscal year
2002.
Fiscal Analysis
The bill amends various sections of the Texas Insurance Code. The
provisions of the bill would require Preferred Provider Benefit Plan
(PPBP) issuers and HMOs to verify the medical necessity for proposed
services between the hours of 6 a.m. and 6 p.m., seven days a week, to
any provider or physician who requests the verification before rendering
services. It would prohibit a PPBP issuer or an HMO from denying payment
for the services rendered unless (1) the provider/physician misstated the
nature of the services or (2) the services authorized were not rendered
or (3) the services were to be provided to an individual that was not a
plan enrollee at a particular point in time. The bill would prohibit
preferred provider carriers and HMOs from requiring the use of a dispute
resolution procedure that violates the new law.
The effective date of the bill is September 1, 2001.
Methodology
The Texas Department of Insurance (TDI) estimates that it will need three
additional FTEs that would handle an additional 3,014 physician and
provider complaints per year. This is based on the agency anticipating
receiving a seventy percent increase over the projected 6,150 complaints
for fiscal year 2001 related to HMOs. The needed three additional
insurance complaint specialists are estimated to each handle
approximately 860 complaints per year.
It is assumed that TDI would adjust its fees to cover the expected costs
of the implementation of the bill.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 323 Teacher Retirement System, 529 Health and
Human Services Commission, 454 Texas Department of
Insurance, 327 Employees Retirement System
LBB Staff: JK, JO, RT, DE