LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
May 11, 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; providing penalties.), Committee Report
2nd House, Substituted
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB1862, Committee Report 2nd House, Substituted: 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. *
**************************************************************************
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 *
****************************************************
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 $(229,812) $229,812 4.0 *
* 2003 (294,236) 294,236 6.0 *
* 2004 (294,236) 294,236 6.0 *
* 2005 (294,236) 294,236 6.0 *
* 2006 (294,236) 294,236 6.0 *
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Technology Impact
Additional computers and hardware for the additional Full-time Equivalent
Positions totaling $16,194 in fiscal year 2002.
Fiscal Analysis
The bill amends various Articles of the Texas Insurance Code. The
provisions of the bill requires Preferred Provider Benefit Plan (PPBP)
carriers and HMOs to verify to a preferred or network physician/provider
that a proposed service is eligible for payment before the services are
rendered. If a service is verified, a PPBP issuer or an HMO cannot deny
payment for the services to the provider/physician unless (1) the
provider/physician misstated the nature of the services; (2) the PPBP or
HMO provides a disclaimer stating that the services are subject to
contract limitations and that the verification does not constitute a
guarantee of payment; or, (3) the services were to be provided to an
individual that was not a plan enrollee and the plan was notified of the
disenrollment in or before 30 days after the enrollment was terminated
and the provider was notified of the enrollees termination within 30 days
of the date of the verification.
The provisions of the bill requires that a health care provider that
accepts a patient enrolled in a health plan must submit claims and
related information using electronic transaction standards established
under the Health Insurance Portability and Accountability Act (HIPAA).
TDI must provide for extensions or temporary waivers for health care
professionals if the Commissioner of Insurance determines that compliance
will cause undue hardship for health care professional in rural areas or
with other special circumstances justifying an extension or waiver. TDI
must adopt an application and review process for requests for these
extensions and waivers. TDI must report annually on the number of and
reasons for extensions and waivers granted and the timetable for
compliance by the individuals granted such waivers.
The effective date of the bill is January 1, 2002.
Methodology
Since the bill's effective date is January 1, 2002, TDI estimates needing
four additional FTEs in fiscal year 2002 and six FTEs in subsequent
years. The additional staff include a program specialist with the
training and experience to identify the universe of health professionals
and institutional providers that would be subject to the timetable and to
make projections about the amount of time it would take to allow these
providers to set up electronic systems enabling them to comply with the
provisions of the bill. The program specialist would also identify the
factors that would justify the granting of exemptions and waivers
requested by health care professionals unable to comply with the
timetable and to provide guidance to staff in evaluating the requests
alleging special circumstances on support of a request for an extension
or waiver.
TDI estimates it will require four insurance specialists to process and
review applications received requesting exemptions and waiver and to
issue certification of the waivers and exemptions that are granted. TDI
would also need one insurance specialist to do the data entry involved
base on each insurance specialist processing 860 review for waivers. The
provisions of the bill requires TDI to adopt an application and review
process for health care professionals requesting extensions and waivers
to the timetable established. There are currently at least 120,000
health care professionals licensed in Texas providing the types of
services for which coverage is available under health plans. TDI
estimates approximately 4 percent would apply for exemptions and waivers
and estimates it would receive at least 5,000 applications per year.
It is assumed the TDI would adjust its fees to cover the cost of
implementing the bill.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies:
LBB Staff: JK, SD, DE