LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 28, 2001
TO: Honorable John T. Smithee, Chair, House Committee on
Insurance
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB2620 by Goodman (Relating to standardizing physician
contracts and forms used in managed care plans.),
Committee Report 1st House, Substituted
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB2620, 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 $(252,167) $252,167 4.0 *
* 2003 (140,644) 140,644 2.0 *
* 2004 (140,644) 140,644 2.0 *
* 2005 (140,644) 140,644 2.0 *
* 2006 (140,644) 140,644 2.0 *
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Technology Impact
Computers and software for the additional Full-time Equivalent positions
(FTEs) totaling $5,398 in fiscal year 2002.
Fiscal Analysis
The bill adds Article 21.52K to the Texas Insurance Code. The provisions
of the bill direct the Texas Department of Insurance (TDI) to establish,
by rule, standard contracts, forms and other documents for routine
managed care functions. The bill applies to managed care plans offered by
health maintenance organizations (HMOs), approved non-profit hospital
corporations, insurers who use preferred provider organizations (PPOs),
and any other entity. TDI must adopt rules implementing the new Article
by January 1, 2002.
The effective date of the bill is September 1, 2001.
Methodology
TDI estimates it would need four additional FTEs in fiscal year 2002 and
two FTEs thereafter to implement the provisions of the bill. They would
include two Insurance Specialists from September 1, 2001 through August
31, 2002 to assist with implementing the rule, answering HMO's and
contractees' questions about the new language, and developing any
necessary amendments to the rules. The Insurance Specialists would work
with TDI's Legal Staff, industry, consumers, and physicians to develop
and implement the rules.
TDI also estimates that it would require two additional full-time
attorneys with expertise and specialized knowledge of PPO's and HMO's to
supplement existing staff. TDI's legal and compliance staff will be
required to assist in the drafting of rules to adopt standardized
contracts, forms and other such documents, as well as respond to various
questions that will arise prior to and after the adoption of the
standardized forms.
It is assumed that 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: 454 Texas Department of Insurance
LBB Staff: JK, JO, RT, DE