LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
March 1, 2001
TO: Honorable David Sibley, Chair, Senate Committee on
Business & Commerce
FROM: John Keel, Director, Legislative Budget Board
IN RE: SB11 by Nelson (Relating to protecting the privacy of
medical records; providing penalties.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* SB11, As Introduced: negative impact of $(2,687,241) 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 $(1,791,005) *
* 2003 (896,236) *
* 2004 (844,298) *
* 2005 (941,497) *
* 2006 (1,168,896) *
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All Funds, Five-Year Impact:
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*Fiscal Probable Probable Probable Change in *
* Year Savings/(Cost) Savings/(Cost) Savings/(Cost) Number of State *
* from General from Federal from TDH Public Employees from *
* Revenue Fund Funds - Federal Health Medicaid FY 2001 *
* 0001 0555 Reimbursements *
* 0709 *
* 2002 $(1,791,005) $(6,219,826) $0 25.0 *
* 2003 (896,236) (1,018,600) 0 25.0 *
* 2004 (844,298) (1,018,600) 2,000,000 20.2 *
* 2005 (941,497) (1,018,600) 2,000,000 20.2 *
* 2006 (1,168,896) (1,018,600) 2,000,000 20.2 *
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Technology Impact
The bill would require 1650 hours of reprogramming of SAVERR, MD, and CMS
automation systems at the Department of Human Services and reprogramming
of various Texas Department of Health (TDH) automation systems (e.g.,
telecommunications hardware, computer hardware, computer software, and
capitalized IT contracts). Programming costs are estimated at $110 per
hour.
Fiscal Analysis
The bill would enact numerous provisions relative to the privacy of
medical records. (Many provisions are conceptually similar to mandated
provisions of the federal Health Insurance Portability and Accountability
Act (HIPAA) final rule.)
The bill would authorize a person to inspect and copy his or her own
clinical records except those created in the course of a clinical
research trial or certain psychiatric records. The bill would authorize
the entity issuing the records to charge a fee for copies.
The bill would prohibit disclosure of protected medical information
unless the individual who is the subject of the medical record consents
to such disclosure. The bill would specify the requirements of written
notice. It also would provide for revocation of consent. The bill would
provide for exceptions to the consent requirement, including situations
where the protected health information is de-identified from the record.
The bill would require separate informed consent for sensitive health
information.
The bill would require a covered entity to provide written notice to an
individual of the entity s medical record privacy practices, including
regular uses, such as administrative.
The bill would provide for remedies for violations of the bill including
civil and criminal penalties.
The bill would be effective September 1, 2001.
Compliance would not be required until September 1, 2003.
Methodology
It is assumed that initial start-up costs at TDH in FY 2002 include
$3,700,000 for a temporary service contract and $2,482,037 for postage.
It is assumed that an increase of 25 FTEs in FY 2002 and FY 2003 and 32.2
FTEs in subsequent fiscal years would be required to enter data relating
to informed consent, notice, and similar requirements.
It is assumed that TDH is a covered entity, health care practitioner,
health care facility, and health care payer for purposes of the
requirements of the bill.
It is assumed that TDH must provide notice of its privacy practices to
all individuals who are the subject of any health information that TDH
receives.
TDH would need to begin obtaining consent forms as early as September 1,
2001. TDH assumes that disclosures of its clients' records and the
tracking of informed consents would need to be entered into a centralized
system.
TDH assumes that the bill would prohibit the matching of newborn
screening with birth certificate records which would prohibit the
identification of the newborns for purposes of Medicaid reimbursements
for newborn screening. TDH assumes a resulting decrease in FTEs
performing the screenings and a loss of Medicaid federal funds. However,
the bill would not prohibit TDH from developing a procedure whereby the
parents of these newborns could give informed consent to use the
information for this purpose.
The Department of Mental Health and Mental Retardation assumes that no
additional resources would be needed to satisfy the requirements of this
bill.
Local Government Impact
No significant fiscal implication to units of local government is
anticipated.
Source Agencies: 655 TX Dept. of Mental Health & Mental Retardation,
302 Office of the Attorney General, 324 Texas
Department of Human Services, 529 Health and Human
Services Commission, 453 Texas Workers'
Compensation Commission, 501 Texas Department of
Health
LBB Staff: JK, JO, AJ, KF