LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
March 30, 2001
TO: Honorable Mike Moncrief, Chair, Senate Committee on
Health & Human Services
FROM: John Keel, Director, Legislative Budget Board
IN RE: SB1592 by Moncrief (Relating to the imposition of a
quality assurance fee on nursing institutions; providing
an administrative penalty.), Committee Report 1st House,
Substituted
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* SB1592, Committee Report 1st House, Substituted: 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. *
**************************************************************************
General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $0 *
* 2003 0 *
* 2004 0 *
* 2005 0 *
* 2006 0 *
****************************************************
All Funds, Five-Year Impact:
***************************************************************************
*Fiscal Probable Probable Probable Probable *
* Year Revenue Savings/(Cost) Revenue Savings/(Cost) *
* Gain/(Loss) from General Gain/(Loss) from Federal *
* from General Revenue Fund from Federal Funds - Federal *
* Revenue Fund 0001 Funds - Federal 0555 *
* 0001 0555 *
* 2002 $186,000,000 $(186,000,000) $279,000,000 $(279,000,000) *
* 2003 202,740,000 (202,740,000) 304,110,000 (304,110,000) *
* 2004 204,246,600 (204,246,600) 306,369,900 (306,369,900) *
* 2005 204,382,194 (204,382,194) 306,573,291 (306,573,291) *
* 2006 204,394,397 (204,394,397) 306,591,596 (306,591,596) *
***************************************************************************
Fiscal Analysis
The bill would amend Chapter 242, Health and Safety Code, by adding
Subchapter Q, Quality Assurance Fee. The bill would require that each
institution, for which a license fee must be paid under Section 242.034,
be assessed a quality assurance fee. The Health and Human Services
Commission (HHSC) or the Texas Department of Human Services (DHS) at the
direction of the Commission would collect the fee. The fee may be
appropriated only for the purposes of the paying the cost of
administering provisions of the bill and increasing rate of reimbursement
paid to institutions under the state Medicaid Program.
The Quality Assurance Fee would be assessed on each licensed institution
at a rate equal to six percent of the institution's gross receipts from
its operations in Texas. The fee would be payable monthly, in addition to
other fees imposed under Chapter 242 of the Health and Safety Code, and
would be an allowable cost for reimbursement under the state Medicaid
program.
If any portion of the chapter is held invalid by a final order of a court
that is not subject to appeal, or if the Health and Human Services
Commission determines that the imposition of the fee and the expenditure
as prescribed by the subchapter of amounts collected will not entitle
the state to receive additional federal funds under the Medicaid
program, the commission is required to stop collection of the quality
assurance fee and return any money collected, but not spent, under the
subchapter to the institutions that paid the fees in proportion to the
total amount paid by those institutions.
Methodology
The HHSC estimate stated either HHSC or DHS would collect and distribute
the fee and HHSC or DHS would likely have to add staff and associated
administrative support. The HHSC estimated administrative costs to be
$1.0 million annually with a one-time technology cost of $100,000 in FY
2002. The HHSC did not include an estimate of staff and administrative
support positions that would be needed pursuant to the bill.
The HHSC estimated General Revenues generated would be between $185.0
million in FY 2002 to $204.0 million in FY 2006. The HHSC assumed that
because provisions of the bill require the General Revenue funds
generated be used for rate reimbursements to nursing facilities, the
State would use the General Revenue funds to draw down additional
Medicaid funds. The Commission estimated these additional federal funds
to be between $279 to $307 million for FY 2002 through 2006,
respectively. The Health and Human Services Commission assumes the
additional State and federal funds would be allocated to the facilities,
if appropriated, through a modeled rate during the first two years and
incorporated into the cost reports using the cost report methodology
subsequently. The Health and Human Services Commission assumes that,
under this scenario, there would be no compounding effect of increased
expenditures adopted through the cost report.
However, the HHSC stated in the estimate if the assumption regarding the
use of the increased fee revenues is not correct, these fees are to be
used only for rate increases for the current year and the previous years'
rate increases become part of the base appropriation for nursing
facilities, then there
**could be a very significant impact on the General Revenue Fund
beginning in the second year of this program (FY 2003).**
In other words, the amount of revenue gains become new General Revenue
costs in the second year of the program
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 324 Texas Department of Human Services, 529
Health and Human Services Commission, 304
Comptroller of Public Accounts
LBB Staff: JK, HD, ML