| TO: | Honorable Dianne White Delisi, Chair, House Committee on State Health Care Expenditures, Select |
| FROM: | John Keel, Director, Legislative Budget Board |
| IN RE: | HB1735 by Delisi (Relating to disease management services under certain state-funded or state-administered health plans. ), Committee Report 1st House, Substituted |
| Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
|---|---|
| 2004 | $1,961,571 |
| 2005 | $2,021,571 |
| 2006 | $2,021,571 |
| 2007 | $2,021,571 |
| 2008 | $2,021,571 |
| Fiscal Year | Probable Savings/(Cost) fromGENERAL REVENUE FUND 1 |
Probable Savings/(Cost) fromGR MATCH FOR MEDICAID 758 |
Probable Savings/(Cost) fromFEDERAL FUNDS 555 |
|---|---|---|---|
| 2004 | ($40,000) | $2,001,571 | $3,012,355 |
| 2005 | $0 | $2,021,571 | $3,032,355 |
| 2006 | $0 | $2,021,571 | $3,032,355 |
| 2007 | $0 | $2,021,571 | $3,032,355 |
| 2008 | $0 | $2,021,571 | $3,032,355 |
The bill would require agencies that operate certain state-funded or state administered health plans to implement a disease management program within their managed care delivery systems. It would also require them to conduct studies of the benefits and costs of applying disease management principles and to report the findings to the Legislature by December 1, 2004.
The Health and Human Services Commission (HHSC) indicated a client services savings related to the implementation of disease management program within the Medicaid program. The Employees Retirement System (ERS) and the University of Texas System indicated that they are already utilizing disease management programs for clients with certain conditions. Therefore, they estimate no additional savings. The A&M System indicated no fiscal impact related to this bill.
The Teacher Retirement System (TRS) identified costs and savings for implementation of a disease management program for TRS-Care retire insurance. An estimated $3.6 million per year in net savings would accrue to the Retired School Employee Group Insurance Fund. The agency stated that there is not yet sufficient information available to evaluate opportunities for savings in the Active Care Program.
The following agencies indicated an administrative cost related to the required study: HHSC, ERS, and the University of Texas System.
Savings assumptions are compared to a continuation of current law and policies.
Regarding client services in the Medicaid program, the following is assumed:
1. The number of impacted average monthly Medicaid managed care clients would total 1,068,511 per year. Of this amount, 42,226 would be Blind and Disabled and 1,026,285 would be non-Disabled and Blind.
2. The estimated All Funds savings per month per Blind and Disabled client would total $4.87. The estimated All Funds savings per month per non-Blind and Disabled client would total $0.21. The same level of savings are assumed to occur each year, beginning in fiscal year 2004. Forty percent of the savings would accrue to General Revenue and 60 percent would accrue to Federal Funds.
Regarding administrative costs for the required studies:
1. It is assumed that the Health and Human Services Commission (HHSC), the Employee Retirement System (ERS), the Teacher Retirement System (TRS), and the University of Texas System would each expend $40,000 in fiscal year 2004 to conduct the study. For HHSC, it is assumed that expense would be shared equally between General Revenue and Federal Funds. For the UT System, it is assumed the expense would be funded with General Revenue. ERS and TRS costs would be borne by their respective trust funds.
| Source Agencies: | 327 Employees Retirement System, 454 Department Of Insurance, 529 Health And Human Services Commission, 710 Texas A&m University System Administration, 720 The University Of Texas System Administration, 323 Teacher Retirement System
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| LBB Staff: | JK, JO, EB, KF, LW
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