LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
Revision 1
April 5, 2001
TO: Honorable John T. Smithee, Chair, House Committee on
Insurance
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB2498 by Haggerty (Relating to cetain cross-border
health care plans offered by health maintenance
organizations.), Committee Report 1st House, Substituted
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB2498, Committee Report 1st House, Substituted: 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 *
****************************************************
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 $(551,283) $551,283 8.5 *
* 2003 (451,900) 451,900 7.5 *
* 2004 (451,900) 451,900 7.5 *
* 2005 (451,900) 451,900 7.5 *
* 2006 (451,900) 451,900 7.5 *
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Technology Impact
Additional computers and software for 8.5 Full-time equivalent positions
(FTEs) totaling $21,592 in fiscal year 2002.
Fiscal Analysis
The bill adds Section 39 to Chapter 20A of the Texas Insurance Code. The
bill would require the Texas Department of Insurance (TDI) to analyze
state and federal laws to determine legal and regulatory impediments to
selling a binational insurance plan. It would also require revising the
Texas Administrative Code rules to conform with the provisions of the
bill and binational issues and revising some internal processes.
TDI would have to develop new exam criteria and methodologies that are
specific to the standard of care in Mexico to effectively monitor the new
plans under the provisions of the bill.
According to TDI, the federal Health Insurance Portability and
Accountability Act does not apply to non-US citizens/residents.
Therefore, there will be two standards for continuation and guaranteed
portability for enrollees in these plans, one for Texas residents and one
for Mexican residents. Also, TDI would need to clarify whether the
Mexican or American set of Quality Assurance standards apply to the
delivery of emergency care in Texas, which is permitted in the bill. In
addition, statutes and regulations related to other federal agencies with
authority over foreign trade and immigration will need to be checked for
conflicts as well.
The bill takes effect September 1, 2001.
Methodology
TDI estimates the provisions of the bill would require a total of 8.5
additional FTEs. The FTEs would include one program administrator only
in fiscal year 2002, which would provide technical knowledge of health
care issues and Health Maintenance Organization (HMO) regulations and
resolve statutory and regulatory barriers to regulating services outside
of Texas and the United States. It would require two nurses with
knowledge of prevailing Mexican community standards who are bilingual in
English and Spanish to examine 6 HMOs per year. TDI is required to
conduct quality assurance exams of HMOs. The examination cycle is based
on a maximum three year cycle with 17 HMOs now operating in the border
counties and projected to develop the cross-border plans.
TDI estimates that 317,532 individuals have HMO coverage in the border
area and that there would be 457 complaints per year. It would require a
half time insurance specialist to handle the additional complaints
regarding these HMOs plans. Three bilingual attorneys would also be
needed to revise all of the rules relating to HMOs and to respond to
numerous questions from physicians and providers in Mexico. One
bilingual investigator would be needed to conduct investigations and
travel to Mexico to review laws and to interview complainants and
witnesses. An administrative technician would also be needed to provide
assistance with telephone calls and correspondence from the different
entities and to support the attorneys and investigator.
It is assumed the agency would adjust fees to offset any costs associated
with the implementation of the bill.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 454 Texas Department of Insurance
LBB Staff: JK, JO, RT, DE