| TO: | Honorable Talmadge Heflin, Chair, House Committee on Appropriations |
| FROM: | John Keel, Director, Legislative Budget Board |
| IN RE: | HB3378 by Hope (Relating to statutory authority to reduce appropriations made by the legislature to certain regulatory entities.), As Introduced |
Estimated savings should be compared to funding levels sufficient to conform to current policies and law. Estimated savings should not be compared to agency "building block" funding requests.
| Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
|---|---|
| 2004 | $158,000 |
| 2005 | $158,000 |
| 2006 | $158,000 |
| 2007 | $158,000 |
| 2008 | $158,000 |
| Fiscal Year | Probable Revenue Gain/(Loss) fromGENERAL REVENUE FUND 1 |
Probable Savings/(Cost) fromGENERAL REVENUE FUND 1 |
Probable Revenue Gain/(Loss) fromDEPT INS OPERATING ACCT 36 |
Probable Savings/(Cost) fromDEPT INS OPERATING ACCT 36 |
|---|---|---|---|---|
| 2004 | ($469,750) | $627,750 | $20,961,107 | ($20,961,107) |
| 2005 | ($469,750) | $627,750 | $471,212 | ($471,212) |
| 2006 | ($452,570) | $610,570 | $471,212 | ($471,212) |
| 2007 | ($442,570) | $600,570 | $471,212 | ($471,212) |
| 2008 | ($429,570) | $587,570 | $471,212 | ($471,212) |
| Fiscal Year | Change in Number of State Employees from FY 2003 |
|---|---|
| 2004 | 29.0 |
| 2005 | 29.0 |
| 2006 | 29.0 |
| 2007 | 29.0 |
| 2008 | 29.0 |
The bill would authorize the State Office of Administrative Hearings, the Department of Insurance, the Board of Medical Examiners, the Racing Commission and the Workers' Compensation Commission to take specific actions to reduce expenditures to comply with reduced appropriations of the agency's state funds under Article VIII of the General Appropriations Act. The amounts of the required reductions would depend on the funding levels adopted in the General Appropriations Act by the 78th Legislature and any savings or costs compared to the 2002-03 budget may already be contained in HB1 as Engrossed.
The bill would require the Department of Insurance to reduce expenditures by eliminating the amount paid by the state to the National Association of Insurance Commissioners for information required for submission under Section 802.052, Insurance Code, as effective June 1, 2003.
The bill would require the Board of Medical Examiners to reduce expenditures by eliminating the physician assistant loan reimbursement program, internal audits and the printing and mailing of the semi-annual physician newsletter.
The bill would require the Workers’ Compensation Commission to reduce expenditures by requiring that a non-prevailing party in a medical dispute resolution case pay the cost of the medical dispute resolution, performing audits on insurance carriers at the Workers’ Compensation Commission offices and requiring insurance carriers or health care providers to pay the cost of an audit if a violation is revealed.
The bill would take effect immediately if it received a vote of two-thirds of all the members elected to each house of the Legislature, otherwise it would take effect September 1, 2003.
The Department of Insurance (TDI) would be required to reduce expenditures by $1,275,000 each year for fees paid to the National Association of Insurance Commissioners (NAIC) for information submitted by insurers in the state of Texas. Because both TDI and insurance companies would be prohibited by statute from paying the fee to NAIC, TDI would no longer be able to access financial data from the NAIC's database. This information is used by the agency to monitor the solvency of insurance companies, so TDI would need to develop and maintain a separate database to acquire this information. In order to develop and maintain this database, TDI would require $22,236,107 and 29 FTEs in fiscal year 2004 and $1,746,212 and 29 FTEs each year thereafter. It is assumed the additional costs would be offset by an increase in the insurance maintenance tax.
The Board of Medical Examiners would be required to reduce expenditures by the following: $90,000 per year by eliminating the physician assistant program; $18,000 per year by eliminating certain internal audits and $50,000 per year by eliminating the semi-annual physician newsletter.
The Workers' Compensation Commission would be required to eliminate costs associated with medical fee disputes that would be paid by the non-prevailing party (3,350 disputes x average of 2.5 review hours x $42 = $351,750 per year). The bill would require audits to be conducted at the Commission's offices instead of onsite at the insurance carrier ($49,000 revenue loss/cost savings plus $14,000 travel cost savings/revenue reimbursement loss = $63,000 per year. The bill would also limit the authority to bill for reviews ($55,000 revenue loss/cost savings per year). It is assumed the additional costs or revenue losses would be offset by adjustments in the insurance maintenance tax.
Since the State Office of Administrative Hearings would still have the authority through a rider in the General Appropriations Act to bill agencies for excessive workloads, the bill would have no fiscal impact on the agency.
The Racing Commission indicated the bill would have no fiscal implications for the agency.
| Source Agencies: | 304 Comptroller of Public Accounts, 360 State Office of Administrative Hearings, 453 Workers' Compensation Commission, 454 Department of Insurance, 476 Racing Commission, 503 Board of Medical Examiners
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| LBB Staff: | JK, JO, SD, RT, JC, JW, RB
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