LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
March 26, 2001
TO: Honorable Elliott Naishtat, Chair, House Committee on
Human Services
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB2906 by Eiland (Relating to the imposition of an
additional fee on nursing and convalescent homes for the
purpose of allowing the state to increase reimbursement
rates to the homes under the state Medicaid program and
to qualify for more federal Medicaid funds.), As
Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB2906, As Introduced: an 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 Probable Probable *
* Year Revenue Savings/(Cost) Revenue Savings/(Cost) *
* Gain/(Loss) from General Gain/(Loss) from Federal *
* from General Revenue Fund from Federal Funds - Federal *
* Revenue Fund 0001 Funds - Federal 0555 *
* 0001 0555 *
* 2002 $185,000,000 $(185,000,000) $280,000,000 $(280,000,000) *
* 2003 189,000,000 (189,000,000) 284,000,000 (284,000,000) *
* 2004 193,000,000 (193,000,000) 290,000,000 (290,000,000) *
* 2005 197,000,000 (197,000,000) 296,000,000 (296,000,000) *
* 2006 200,000,000 (200,000,000) 300,000,000 (300,000,000) *
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Fiscal Analysis
The bill would amend Subchapter B, Chapter 242, Health and Safety Code,
by adding Section 242.0341, Quality Assurance Fee. The bill would require
that each institution, for which a license fee must be paid under
Section 242.034, be assessed a quality assurance fee. The Health and
Human Services Commission (HHSC) or the Texas Department of Human
Services (DHS) at the direction of the Commission would collect the fee.
The fee may be appropriated only for the purposes of the paying the cost
of administering provisions of the bill and increasing rate of
reimbursement paid to institutions under the state Medicaid Program.
The Quality Assurance Fee would be assessed on each licensed institution
at a rate equal to six percent of the institution's gross receipts from
its operations in Texas. The fee would be payable monthly, in addition to
other fees imposed under Chapter 242 of the Health and Safety Code, and
would be an allowable cost for reimbursement under the state Medicaid
program.
Section 242.0341 provides the quality assurance fee may not be imposed
and collected, and the department is not required to adopt rules under
Subsection (d) or enforce rules already adopted under that subsection,
if the commission (HHSC) determines the imposition of the fee and the
expenditure as prescribed by this section of amounts collected would not
entitle the state to receive additional federal funds under the Medicaid
program.
Methodology
The HHSC estimate stated either HHSC or DHS would collect and distribute
the fee and HHSC or DHS would likely have to add staff and associated
administrative support. The HHSC estimated administrative costs to be
$1.0 million annually with a one-time technology cost of $100,000 in FY
2002. The HHSC did not include an estimate of staff and administrative
support positions that would be needed pursuant to the bill.
The HHSC estimated General Revenues generated would be between $185.0
million in FY 2002 to $200.0 million in FY 2006. The HHSC assumed that
because provisions of the bill require the General Revenue funds
generated be used for rate reimbursements to nursing facilities, the
State would use the General Revenue funds to draw down additional
Medicaid funds. The Commission estimated these additional federal funds
to be between $280 to $300 million for FY 2002 through 2006,
respectively. The Health and Human Services Commission assumes the
additional State and federal funds would be allocated to the facilities,
if appropriated, through a modeled rate during the first two years and
incorporated into the cost reports using the cost report methodology
subsequently. The Health and Human Services Commission assumes that,
under this scenario, there would be no compounding effect of increased
expenditures adopted through the cost report.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 324 Texas Department of Human Services, 501 Texas
Department of Health, 529 Health and Human Services
Commission, 304 Comptroller of Public Accounts
LBB Staff: JK, HD, KF, ML