LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
May 10, 2001
TO: Honorable David Sibley, Chair, Senate Committee on
Business & Commerce
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB2498 by Haggerty (Relating to certain cross-border
health care plans offered by health maintenance
organizations.), Committee Report 2nd House, Substituted
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB2498, Committee Report 2nd 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 $(521,767) $521,767 8.0 *
* 2003 (427,562) 427,562 7.0 *
* 2004 (427,562) 427,562 7.0 *
* 2005 (427,562) 427,562 7.0 *
* 2006 (427,562) 427,562 7.0 *
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Technology Impact
Computers and software for the additional Full-time Equivalent positions
totaling $18,893 in fiscal year 2002.
Fiscal Analysis
The bill adds a new Chapter to the Texas Insurance Code which allows a
Health Maintenance Organization (HMO) to offer cross-border health care
to individuals and large and small employers. According to the Texas
Department of Insurance (TDI), such HMOs have all of the powers and
authority granted to an HMO. The HMOs may extend their service areas into
Mexico for the purpose of providing health care to (1) Mexican citizens
within 62 miles of the Mexico/United States border or, (2) a resident of
Mexico who works within 62 miles of the Mexico/United States border. The
delivery of services within Mexico must be "based on the prevailing
community standards in the United Mexican States." Also, the standards
that apply in the United Mexican States would apply to (1) the licensing
and credentialing of physicians and providers, (2) peer review, and (3)
quality of care standards utilized by the HMO. An employer who offers
the plan to its employees must also offer at least one other plan that
provides coverage for services delivered in Texas.
The effective date of the bill is September 1, 2001.
Methodology
TDI estimates that it would require 8 additional FTEs in fiscal year 2002
and 7 FTEs in subsequent years. The FTEs would include a program
administrator only in fiscal year 2002 who would provide technical
knowledge of health care issues and 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.
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 TDI 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