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 ************************************************************************** * 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. * ************************************************************************** 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: ************************************************************************** *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 * ************************************************************************** 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