LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
May 8, 2001
TO: Honorable Patricia Gray, Chair, House Committee on Public
Health
FROM: John Keel, Director, Legislative Budget Board
IN RE: SB789 by Moncrief (Relating to the regulation and
reimbursement of telemedicine medical services.),
Committee Report 2nd House, Substituted
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* SB789, Committee Report 2nd House, Substituted: negative impact *
* of $(11,043,849) 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 $(6,673,597) *
* 2003 (4,370,252) *
* 2004 (6,209,298) *
* 2005 (6,603,186) *
* 2006 (6,566,365) *
****************************************************
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 *
* General GR Match GR Match Federal Employees *
* Revenue for Title for Funds - from FY 2001 *
* Fund XXI (CHIP) Medicaid Federal *
* 0001 8010 0758 0555 *
* 2002 $(129,076) 1.0 *
* $(1,379,391) $(5,165,130)$(8,056,446) *
* 2003 (1,260,671) (265,114) (2,844,467) (4,566,639) 0.5 *
* 2004 (1,260,671) (265,114) (4,683,513) (7,045,159) 0.0 *
* 2005 (1,260,671) (265,114) (5,077,401) (7,574,992) 0.0 *
* 2006 (1,260,671) (265,114) (5,040,580) (7,540,554) 0.0 *
***********************************************************************
Technology Impact
See details under Methodology.
Fiscal Analysis
The bill would amend telemedicine and other statutes.
Section 1 would require the Health and Human Services Commission (HHSC)
to require by rule that all State Medicaid-operating agencies provide
Medicaid reimbursement for telemedicine medical services. Section 1 of
the bill would also require HHSC to establish "telehealth" pilot
programs. It is assumed pilots would be established for both the
Medicaid and Children's Health Insurance Program (CHIP) programs.
Section 4 would require CHIP providers to provide telehealth services.
HHSC assumes no impact.
Section 17 would establish a home telemedicine pilot program.
Section 18 would establish a jail diversion pilot program for persons
with mental illness.
Section 19 would establish a teledentistry pilot program.
Methodology
Section 1:
Provision of Telemedicine Services to Medicaid Recipients
The following estimate relates only to services to be provided through
the Department of Health (TDH). Potentially, the bill could require
additional services be funded at the Department of Human Services (DHS)
and other agencies. If additional Medicaid-operating agencies were
affected, additional costs would result.
TDH estimates the bill would impact the Medicaid program in the following
ways: an estimated cost related to rural providers totaling $51,268 in
FY 2002, $863,046 in FY 2003, $1,867,358 in FY 2004, $2,080,424 in FY
2005, and $2,084,068 in FY 2006; an estimated cost related to urban
providers totaling $161,570 in FY 2002, $2,039,926 in FY 2003, $4,216,210
in FY 2004, $4,678,143 in FY 2005, and $4,678,143 in FY 2006; an
estimated cost related to computer imaging and assessment and referral
totaling $85,184 in FY 2002, $1,091,884 in FY 2003, $ 2,263,718 in FY
2004, $2,512,440 in FY 2005, and $2,516,842 in FY 2006. The federal
share of client services expenses would total 60.20% in FY 2002, 60.08%
in FY 2003, and 60.07% in each subsequent year.
Telehealth Pilot--Medicaid and CHIP
It is assumed federal approval would allow for March 2002 implementation.
It is assumed 600 TDH clients per month per year would receive
telehealth services. Telehealth services would cost $110 per month and
include the following: education by video, education by a health
professional, and supplemental consultations. The federal share of
client services expenses would total 60.20% in FY 2002, 60.08% in FY
2003, and 60.07% in each subsequent year. A contract related to
collection and analysis of data, including an assessment of client
satisfaction, would total $37,500 in FY 2002, and $87,500 for each
subsequent year. This expense would be shared equally by the federal
government and the State. The same client and cost assumptions would
apply to the CHIP program, however, the federal match for client services
would total 72.14% in FY 2002, and 72.05% in each subsequent year.
Section 17:
It is assumed federal approval would allow for March 2002 implementation.
It is assumed 600 TDH clients per month per year would receive
telemedicine services. Telemedicine services would cost $250 per month
and include the following: education by video, education by a health
professional, counseling related to depression, monitoring of medication
compliance and vital signs, and supplemental consultations. A contract
related to collection and analysis of data, including an assessment of
client satisfaction, would total $37,500 in FY 2002 and $87,500 for each
subsequent year. A one-time equipment expense per client is estimated at
$18,250. The federal share of client services expenses would total
60.20% in FY 2002, 60.08% in FY 2003, and 60.07% in each subsequent year.
This expense would be shared equally by the federal government and the
State. It is assumed the pilot applies only to TDH. If additional
Medicaid-operating agencies were affected, additional costs would result.
Section 18:
The bill would require the pilot sites and central facilities to set up
computers for instant data transmission. One time costs for computer
stations and leased lines for data transmission are included. In
addition, video assessment and conferencing would be necessary to and
from remote jail locations and central facilities. One-time capital
costs are assumed for equipment at all locations and ongoing costs for
secure audio/video lines are included also. Technology capital costs for
MHMR in the first year are estimated to be $193,600 and technology
operating costs are estimated to be $74,880 each year thereafter. The
Department of Mental Health and Mental Retardation assumes costs to
implement the provisions of the bill would include the aforementioned
technology costs plus $1,185,791 for the provision of treatment to
persons with mental illness who are diverted from jail via this program.
It is assumed for the purposes of estimating cost that the urban pilot
site would be Harris County and the rural site would be developed through
the Texana Mental Health Authority. It is assumed the urban site would
serve 320 clients per year and the rural site would serve 110 clients per
year. Urban clients would continue treatment for 14 weeks and rural
clients for 28 weeks, based on the experience of the centers. Treatment
is estimated at $629 per month or $157.25 per week. These costs are
assumed to be added to existing capacity at the centers to ensure
provision of services.
Section 19:
It is assumed that the provision of teledentistry dental services is
intended to apply only to participants in the pilot program. A broader
provision of teledentistry dental services to Medicaid clients would
result in additional costs. It is assumed the pilot would begin
September 1, 2001, and end one year later. It is assumed that 1,000
school children would receive pilot program services at a cost of $222
per child. The federal share of client benefits services would total
60.20%. It is assumed the provision regarding a program administrator
would require one additional FTE position in FY 2002 (and .5 of an FTE
position in FY 2003). It is also assumed the eight members of the
advisory committee would travel four times in FY 2002, and one time in
FY 2003, at a cost per trip per member of $400. Administrative expenses
would be divided equally between Federal Funds and General Revenue Match
for Medicaid.
Local Government Impact
Section 18: The bill would impact the urban and rural community center
selected as a pilot for this jail diversion program. Costs to the
centers are included above. It is assumed, however, that costs related
to staff training for jail diversion will be absorbed by the community
center pilot sites.
Source Agencies: 367 Telecommunications Infrastructure Fund Board,
324 Texas Department of Human Services, 503 Texas
State Board of Medical Examiners, 501 Texas
Department of Health, 529 Health and Human
Services Commission
LBB Staff: JK, HD, PP