LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session May 26, 2001 TO: Honorable Bill Ratliff, Lieutenant Governor Honorable James E. "Pete" Laney, Speaker of the House FROM: John Keel, Director, Legislative Budget Board IN RE: SB11 by Nelson (Relating to protecting the privacy of medical records; providing penalties.), Conference Committee Report ************************************************************************** * No significant fiscal implication to the State is anticipated. * ************************************************************************** The bill would reference the federal Health Insurance Portability and Accountability Act (HIPAA) and define terms as per HIPAA with the exception of the following terms: "covered entity," "marketing," and "protected health information." "Covered entity" would include governmental units that possess, transmit, obtain, or store protected health information. The bill would exempt "covered entities" as defined by HIPAA from the bill's Health and Safety Code provisions except those related to marketing and reidentified information. Thus, programs such as the Medicaid, Children with Special Health Care Needs, Medical Transportation, and the Children's Health Insurance Program would be exempted. According to the Department of Health (TDH), the Special Supplemental Nutrition Program for Women, Infants, and Children, the Genetics Program, the Family Planning Program, Vital Records, Health Care Quality and Standards, and the Newborn Hearing Screening Program would not be exempted and must comply with the following provisions: (1) An individual's access to his or her protected health information; (2) Amendment of protected health information; (3) Uses and disclosures of such information, including consent *; and (4) Notice of privacy practices. * Consent would not be required for disclosure to public health authorities or any state agency in conjunction with a federal or state health benefit program. Based on TDH's estimates, the costs associated with these provisions are not significant and could be reasonably absorbed within existing resources. Employee benefit plans, worker's compensation programs, ERISA programs, certain educational records, financial institutions, and covered entities engaging in activities of financial institutions are excluded. The bill would provide for injunctive relief and penalties. The above provisions would be effective on September 1, 2001, and require compliance by September 1, 2003. The bill would authorize the Department of Insurance to investigate violations and impose fines. Insurance Code provisions would take effect January 1, 2002. Local Government Impact No significant fiscal implication to units of local government is anticipated. Source Agencies: 501 Texas Department of Health, 529 Health and Human Services Commission LBB Staff: JK, HD, SW, AJ