LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
May 3, 2001
TO: Honorable Patricia Gray, Chair, House Committee on Public
Health
FROM: John Keel, Director, Legislative Budget Board
IN RE: SB43 by Zaffirini (Relating to simplifying the
certification process of medical assistance provided to
children.), Committee Report 2nd House, Substituted
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* SB43, Committee Report 2nd House, Substituted: negative impact of *
* $(324,530,605) 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 Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $(121,873,111) *
* 2003 (202,657,494) *
* 2004 (224,867,761) *
* 2005 (237,500,535) *
* 2006 (247,107,384) *
****************************************************
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 *
* GR Match GR Match Federal Federal Employees *
* for for Funds - Funds - from FY 2001 *
* Medicaid Medicaid Federal Federal *
* 0758 0758 0555 0555 *
* 2002 $11,183,860 $11,183,860 (645.0) *
* $(133,056, $(200,624, *
* 971) 063) *
* 2003 15,670,582 15,670,582 (903.0) *
* (218,328, (327,712, *
* 076) 116) *
* 2004 16,399,577 16,399,577 (946.0) *
* (241,267, (362,045, *
* 338) 061) *
* 2005 17,168,553 17,168,553 (990.0) *
* (254,669, (382,163, *
* 088) 597) *
* 2006 17,977,210 17,977,210 (1,037.0) *
* (265,084, (397,787, *
* 594) 466) *
***********************************************************************
Fiscal Analysis
The bill would modify the Medicaid application and recertification
processes for children under the age of 19 to make them comparable to
those of the Children's Health Insurance Program (CHIP). Specific
changes include: eliminating the face-to-face interview at application
and recertification, simplifying documentation and verification, and
providing continuous eligibility for 12 months for a child under 19
years of age, with recertification performed either annually or before
the child's 19th birthday. The bill would take effect January 2, 2002,
requiring that rules for continuous eligibility be adopted by the
appropriate state Medicaid agency by February 1, 2002.
Methodology
General Assumptions
All policy changes would impact the Department of Health (TDH), the
Department of Human Services (DHS), and the Employees Retirement System
(ERS). It is assumed that funding would be realigned among state agencies
as needed, with implementation occurring January 2002. No costs related
to automation are assumed. Medicaid services provided by TDH would
include premiums (weighted for fee for service and managed care),
prescriptions, dental, physician, hospital, laboratory and other
services. Client costs would remain at the estimated FY 2001 level, with
no adjustment for inflation or change in service utilization. (Average
costs do vary according to the mixture of client risk groups.) The
federal match for client services would be 60.20% in FY 2002, 60.08% in
FY 2003, and 60.07% in subsequent years. To account for potential
overlap in clients, estimates for Eliminating the Face-to-Face Interview
and Simplifying Documentation and Verification have been reduced by 10%.
Annual savings/costs per eligibility-related FTE at DHS would total
approximately $30,850. Of this amount, 19% is for employee benefits
funded at ERS. The federal share of FTE expenses would be 50% of the
total.
Eliminating the Face-to-Face Interview
Recipient months per month would increase by 9,176 in FY 2002, 27,734 in
FY 2003, 34,695 in FY 2004, 37,254 in FY 2005, and 38,193 in FY 2006.
Monthly client services costs would total $138.67 each fiscal year. A
reduction in application processing time would result in a net FTE
reduction totaling 263.7 in FY 2002, 369.9 in FY 2003, 387.0 in FY 2004,
405.0 in FY 2005, and 424.8 in FY 2006.
Simplifying Documentation and Verification
Recipient months per month would increase by 20,617 in FY 2002, 63,202 in
FY 2003, 80,357 in FY 2004, 87,339 in FY 2005, and 91,216 in FY 2006.
Monthly client services costs would range from $142.99 in FY 2002 to
$141.64 in FY 2006. An increase in the number of eligible cases would
offset a reduction in application processing time, resulting in a net FTE
increase totaling 80.1 in FY 2002, 112.5 in FY 2003, 117.0 in FY 2004,
123.3 in FY 2005, and 128.7 in FY 2006.
Providing Continuous Eligibility for 12 Months, with 12 Month
Recertification
It is assumed that clients would receive an additional 3.82 months of
coverage, increasing recipient months per month by 170,179 in FY 2002,
238,451 in FY 2003, 249,544 in FY 2004, 261,245 in FY 2005, and 273,550
in FY 2006. Monthly client services costs would range from $137.39 in
FY 2002, to $134.14 in FY 2006. Replacing the current six month review
with an annual review would result in an FTE reduction totaling 461.0 in
FY 2002, 646.0 in FY 2003, 676.0 in FY 2004, 708.0 in FY 2005, and 741.0
in FY 2006.
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, 304 Comptroller
of Public Accounts
LBB Staff: JK, HD, PP