LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session March 12, 2001 TO: Honorable Mike Moncrief, Chair, Senate Committee on Health & Human Services FROM: John Keel, Director, Legislative Budget Board IN RE: SB65 by Moncrief (Relating to the regulation of certain automated systems used to dispense prescription drugs.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * SB65, As Introduced: 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. * ************************************************************************** The following table assumes an immediate effective date. All Funds, Six-Year Impact: ************************************************************************** *Fiscal Probable Probable Revenue Change in Number of * * Year Savings/(Cost) from Gain/(Loss) from State Employees from * * General Revenue Fund General Revenue Fund FY 2001 * * 0001 0001 * * 2001 $(18,565) $18,565 0.0 * * 2002 (106,649) 106,649 1.0 * * 2003 (81,039) 81,039 1.0 * * 2004 (81,039) 81,039 1.0 * * 2005 (81,039) 81,039 1.0 * * 2006 (81,039) 81,039 1.0 * ************************************************************************** The following table assumes a 90 day effective date. All Funds, Five-Year Impact: ************************************************************************** *Fiscal Probable Probable Revenue Change in Number of * * Year Savings/(Cost) from Gain/(Loss) from State Employees from * * General Revenue Fund General Revenue Fund FY 2001 * * 0001 0001 * * 2002 $(125,216) $125,216 1.0 * * 2003 (81,039) 81,039 1.0 * * 2004 (81,039) 81,039 1.0 * * 2005 (81,039) 81,039 1.0 * * 2006 (81,039) 81,039 1.0 * ************************************************************************** Technology Impact The agency would have to modify its data processing system to accommodate the data generated by the bill. It is anticipated that approximately $21,000 will be required for the analysis, design, coding, testing and implementation to the agency's computer system. Fiscal Analysis The bill would require the Texas State Board of Pharmacy (TSBP) to adopt rules regarding the use of an automated pharmacy system located at a health care facility regulated by the state, and at a remote location from that of a Class A (Community) or Class C (Institutional) pharmacy, by February 24, 2002. The bill would take immediate effect if it receives the required two-thirds vote in both chambers. Otherwise, the effective date is 90 days. Methodology The Pharmacy Board assumes about 1,100 facilities would use an automated pharmacy system requiring regulation and inspection by TSBP. Initial startup costs of $125,216 includes an estimated 270 hours for initial data entry and implementation of the provisions of the bill. Table 1 assumes the bill would take effect immediately and the agency would incur approximately $18,565 of start-up costs in FY 2001. In FY 2002, the agency estimates additional costs of $106,649 associated with additional operating costs and the need for one FTE to conduct biennial inspections of the remote facilities. Table 2 assumes a 90 day effective date and all start-up costs are in FY 2002. It is assumed the agency would adjust fees to cover any costs associated with the implementation of the bill. The Comptroller's e-Texas report states there could be total State and Federal savings of $5 million annually to Medicaid if all nursing facilities with more than 100 beds purchased or leased an automated drug dispensing machine. The e-Texas report also stated that actual savings would depend on the actions of individual care facilities. Local Government Impact No significant fiscal implication to units of local government is anticipated. Source Agencies: 515 Texas State Board of Pharmacy, 324 Texas Department of Human Services LBB Staff: JK, HD, RT, ER, KG