LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 10, 2001
TO: Honorable Mike Moncrief, Chair, Senate Committee on
Health & Human Services
FROM: John Keel, Director, Legislative Budget Board
IN RE: SB8 by Cain (Relating to discrimination in health care
rates and reimbursement; providing administrative
penalties.), Committee Report 1st House, Substituted
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* SB8, Committee Report 1st House, Substituted: 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 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 $(452,375) $452,375 2.0 *
* 2003 (192,018) 192,018 2.0 *
* 2004 (192,018) 192,018 2.0 *
* 2005 (192,018) 192,018 2.0 *
* 2006 (192,018) 192,018 2.0 *
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Technology Impact
Computers and software for the two additional Full-time Equivalent
Positions for the Texas Department of Insurance (TDI) totaling $5,398 in
fiscal year 2002.
Fiscal Analysis
The provisions of the bill adds a new article 21.53N of the Texas
Insurance Code, the Women's Equal Health Care Act. Section 3 of the
Article would require all health plans subject to the bill to reimburse
physicians and other health care providers who provide reproductive
health and oncology services to women at an amount not less than the
average compensation per hour or unit. The reimbursement would be the
same as would be paid to a physician or provider for the same resources
used for health services provided exclusively to men or the general
population. Section 4 would require all health plans subject to the act
to calculate premium rates that allocate evenly to men and women of the
same age group the costs anticipated to be associated with women's
reproductive services. The Commissioner of Insurance would be required
to develop standards and adopt rules based on these standards that would
permit the collection and analysis of data to monitor the compliance of
each health plan with these standards.
The effective date would be September 1, 2001.
Methodology
TDI estimates the provisions of the bill would require two additional
FTEs. All health benefit plans must file their rates with TDI. In order
to determine plans compliance with the new rules, TDI would need to
conduct an initial data call to review all rates currently in effect and
review all rate filings as they are received. These reviews would be
conducted by TDI to (1) verify the rate filing contains the information
required by the rule and (2) determine if the rates are not less than the
average compensation as described in the bill. TDI estimates it will
need an actuary and an insurance specialist to review the rates and
generate compliance reports for all plans subject to the bill. The
actuary would also review complaints received relating to non-compliance
with the bill. In addition, the insurance specialist would conduct the
initial data call, report the on-going rate filings by insurers and HMOs
for the actuary's review and analysis, and prepare reports and referrals
as needed. Both the actuary and program specialist would be required to
assist other TDI staff in drafting the required rules for adoption.
According to TDI, they currently have no means of assessing these average
compensation rates to determine if plans are providing reimbursement at
the rates required by the bill. This information is highly proprietary
and difficult to collect. Based on information acquired in the past, TDI
believes there is a health care cost database available for purchase on
a subscription basis, which could be used for comparison. TDI estimates
the initial purchase of access and renewal to this database would be
approximately $71,100 each year.
TDI estimates that rule development will involve a one-time cost for
hiring a consulting actuarial firm to assist in developing standards and
methods for the collection and analysis of the appropriate data. Based
on recent experience, TDI estimates the consulting cost to be
approximately $250,000, in fiscal year 2002.
It is assumed TDI would adjust its fees to cover costs of implementing
the bill.
Local Government Impact
No significant fiscal implication to units of local government is
anticipated.
Source Agencies: 327 Employees Retirement System, 324 Texas
Department of Human Services, 454 Texas Department
of Insurance, 529 Health and Human Services
Commission, 501 Texas Department of Health
LBB Staff: JK, AD, HD, DE