LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session April 18, 2001 TO: Honorable Patricia Gray, Chair, House Committee on Public Health FROM: John Keel, Director, Legislative Budget Board IN RE: HB3507 by Maxey (Relating to the regulation of dentistry and the provision of dental services.), Committee Report 1st House, Substituted ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * HB3507, Committee Report 1st House, Substituted: negative impact * * of $(142,797) 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 Net Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2002 $(222,309) * * 2003 79,512 * * 2004 114,405 * * 2005 114,405 * * 2006 114,405 * **************************************************** All Funds, Five-Year Impact: *********************************************************************** *Fiscal Probable Probable Probable Probable Change in * * Year Savings/ Savings/ Savings/ Savings/ Number of * * (Cost) from (Cost) from (Cost) from (Cost) from State * * General General GR Match GR Match Employees * * Revenue Revenue for for from FY 2001 * * Fund Fund Medicaid Medicaid * * 0001 0001 0758 0758 * * 2002 $(115,641) $115,641 $1,010,853 3.0 * * $(1,233,162) * * 2003 (56,324) 56,324 (934,389) 1,013,901 2.5 * * 2004 (56,324) 56,324 (899,750) 1,014,155 2.0 * * 2005 (56,324) 56,324 (899,750) 1,014,155 2.0 * * 2006 (56,324) 56,324 (899,750) 1,014,155 2.0 * *********************************************************************** *************************************************************************** *Fiscal Probable Savings/(Cost) from Probable Revenue Gain/(Loss) * * Year Federal Funds - Federal from Federal Funds - Federal * * 0555 0555 * * 2002 $(1,611,706) $1,528,979 * * 2003 (1,371,225) 1,525,931 * * 2004 (1,353,568) 1,525,677 * * 2005 (1,353,568) 1,525,677 * * 2006 (1,353,568) 1,525,677 * *************************************************************************** Technology Impact Automation costs are detailed under Methodology--Article IV. Fiscal Analysis The bill would make a number of changes regarding the regulation of dentistry and the provision of dental services. Article I would revise dental fees paid by the Medicaid program. The bill would reduce the hospitalization fee, eliminate the behavior management fee (except for patients diagnosed with a mental or physical disability), and eliminate the nutritional consultation fee. No fiscal impact is assumed for these changes since the bill directs that freed-up funding should be redistributed to other commonly billed dental services for which adequate accountability measures exist. Article I would also reduce the reimbursement rate for a stainless steel crown to an amount equal to the reimbursement rate for an amalgam or resin filling. The bill does not direct that freed-up funding should be redistributed, nor does it direct that the reimbursement rate for an amalgam or resin filling should be increased. Therefore, a savings is assumed. Article II would direct the "Commissioner of Human Services" to appoint a program administrator to administer a Medicaid pilot program that uses teledentistry and other methods of dental services to provide dental services to students in one public school district in the state. The program administrator would establish a control group not to exceed 1,000 students to provide a benchmark for measuring performance of the pilot program. Not later than December 31, 2002, the program administrator would submit a report to the legislature regarding the pilot. The bill would also direct the commissioner to appoint an advisory committee related to the teledentistry pilot program. The article would expire December 31, 2002, with the advisory committee abolished on the same date. Client benefit costs and administrative costs are assumed for this article. Travel reimbursement for advisory committee members would have to be specifically authorized by the General Appropriations Act. It is assumed that the provision of teledentistry dental services is intended to apply only to participants in the pilot program. A broader provision of teledentistry dental services to Medicaid clients would result in additional costs. Article III would direct the State Board of Dental Examiners (SBDE) to establish an alternative dental hygiene training program and to appoint an advisory committee to advise the board in developing the hygiene training equivalency program. One FTE and travel costs are assumed for this article. Travel reimbursement for advisory committee members would have to be specifically authorized by the General Appropriations Act. Article IV would allow dentists to delegate certain duties to dental hygienists under certain conditions. The bill would allow for delegation of the application of a pit and fissure sealant to a dental assistant, provided the assistant had achieved a pit and fissure sealant certificate. Costs to the Medicaid program are assumed. Additionally, one FTE and automation costs are assumed for SBDE. Article V would establish temporary reciprocal licensure for dentists who practice in medically underserved areas. Potentially, this provision could result in new revenue and new costs. However, these impacts have not been estimated. Article VI would remove the in-state institution limit on educational repayment assistance provided by SBDE for dentists. The bill would also repeal the time limit concerning payment assistant grants to dentists. No fiscal impact is assumed. Methodology Article I It is estimated the Medicaid reimbursement for a stainless steel crown would be reduced by $10.68 per crown. The anticipated number of steel crowns per year is 237,812. The annual savings would total $2,539,832. Savings would accrue to Federal Funds and to General Revenue Match for Medicaid. The federal share would total 60.20% in FY 2002, 60.08% in FY 2003, and 60.07% in each subsequent year. Article II It is assumed the pilot would begin September 1, 2001, and end one year later. It is assumed that 1,000 school children would receive pilot program services at a cost of $222 per child. The federal share of client benefits services would total 60.20%. It is assumed the provision regarding a program administrator would require one additional FTE position in FY 2002 (and .5 of an FTE position in FY 2003). It is also assumed the eight members of the advisory committee would travel four times in FY 2002, and one time in FY 2003, at a cost per trip per member of $400. Administrative expenses would be divided equally between Federal Funds and General Revenue Match for Medicaid. Article III It is assumed the SBDE would require one additional FTE. One-time costs related to advisory committee travel and related expenses would total $28,340 in FY 2002. Costs would be paid with General Revenue, however, it is anticipated the SBDE would increase fees to offset costs. Article IV TDH estimates allowing dental assistants to perform the application of a pit and fissure sealant would result in 77,836 additional services per year at a cost of $24.38 per service. TDH estimates allowing hygienists to act independently would result in 7,025 additional services per year at a cost of $50.63 per service. The federal share of client services expenses would total 60.20% in FY 2002, 60.08% in FY 2003, and 60.07% in each subsequent year. TDH also estimates a one-time automation cost to establish hygienists as a new provider type and to accomplish related claims processing changes, totaling $167,000 in FY 2002. This administrative expense would be divided equally between Federal Funds and General Revenue Match for Medicaid. It is assumed the SBDE would require one additional FTE. It is estimated that one-time automation costs would total $23,575 in FY 2002. Annual maintenance costs, beginning in FY 2003, would total $1,800. Costs would be paid with General Revenue, however, it is anticipated the SBDE would increase fees to offset costs. Local Government Impact No fiscal implication to units of local government is anticipated. Source Agencies: 529 Health and Human Services Commission, 324 Texas Department of Human Services, 504 State Board of Dental Examiners, 501 Texas Department of Health LBB Staff: JK, HD, PP