LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 7, 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 contracts,
forms, and other documents used in managed care plans.),
As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB2620, As Introduced: 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 $(452,552) $452,552 8.0 *
* 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
Additional computers and software for two of the eight 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 new
article directs 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 that it would need eight additional FTEs in fiscal year
2002 and two FTEs thereafter to implement the provisions of the bill.
They would include six Insurance Specialists from September 1, 2001
through August 31, 2002 for the voluminous types of contracts and forms
to be promulgated, and the rule adoption deadline of January 1, 2002.
They would be needed after the January 1, 2002, rule adoption date to
assist with implementing the rule, answering HMOs 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/providers to develop and
implement the rules.
TDI also estimates that it would require two additional full-time
attorneys with expertise and specialized knowledge of PPOs and HMOs to
supplement existing staff. TDI's legal staff will be required to assist
TDI's Life, Health and Licensing staff in drafting rules to adopt
standardized contracts, forms and other documents used in managed care
plans, as well as to 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: 327 Employees Retirement System, 454 Texas
Department of Insurance
LBB Staff: JK, JO, RT, DE