TO: | Honorable Robert Duncan, Chair, Senate Committee on State Affairs |
FROM: | John S. O'Brien, Deputy Director, Legislative Budget Board |
IN RE: | SB469 by Averitt (Relating to time and cost limitations in certain contracts offered by a health maintenance organization.), As Introduced |
Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
---|---|
2006 | ($86,600) |
2007 | ($164,077) |
2008 | ($223,711) |
2009 | ($215,039) |
2010 | ($215,039) |
Fiscal Year | Probable (Cost) from INSURANCE MAINT TAX FEES 8042 |
Change in Number of State Employees from FY 2005 |
---|---|---|
2006 | ($86,600) | 1.0 |
2007 | ($164,077) | 3.0 |
2008 | ($223,711) | 4.5 |
2009 | ($215,039) | 4.5 |
2010 | ($215,039) | 4.5 |
The bill would amend the Insurance Code relating to time and cost limitations in certain contracts offered by a health maintenance organization. The Department of Insurance anticipates additional complaints being filed from carriers who file Exclusive Provider Benefit Plans (EPBPs). The Life Health and Licensing Division at the Department of Insurance states that the cost for implementing this bill will be approximately $86,600 in FY 2006 and $164,077 in FY 2007 with additional full-time equivalent employees (FTEs) needed to process complaints.
The bill would take effect April 1, 2005, if the bill receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If the bill does not receive the vote necessary for effect on April 1, 2005, the bill would take effect September 1, 2005.
According to the Texas Department of Insurance (TDI) data, there are currently approximately 125 carriers that have filed Preferred Provider Organization (PPO) plans and the TDI believes that approximately 60 of these carriers will also file Exclusive Provider Benefit Plans (EPBPs) during the first three years after this bill takes effect. Because EPBPs are closed networks they will, in several respects, be comparable to Health Maintenance Organizations (HMO) and follow the same pattern of complaints as those related to HMOs.
TDI estimates that 1,200 complaints would be generated in FY 2006 and 2,400 in FY 2007. Based on complaints received, TDI estimates that two onsite complaint/targeted examinations per year may be necessary. The average travel cost per exam is approximately $1,614.
TDI states that in order to determine reasonable co-payment, coinsurance and deductible restrictions as required under this bill, in FY 2006 TDI would require consultant services from an actuarial firm using data not available to TDI staff at an estimated cost of $30,000 in fiscal year 2006.
Based on the analysis above, TDI estimates 4.5 FTEs would be needed in FY2006-2010. The FTEs needed would be as follows: FY 2006 - 1 Insurance Specialist V at $35,100; FY 2007 - 1 Insurance Specialist V plus one Nurse IV and one Insurance Specialist IV at $107,796; FY 2008 - FY 2010: 1 Nurse IV, 1 Insurance Specialist V, 1 Insurance Specialist IV, plus 1.5 Insurance Specialist IIIs at $154,398. Additional costs associated with implementing the provisions of this bill in the table above would include other operating expenses and employee benefits each year.
Source Agencies: | 454 Department of Insurance
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LBB Staff: | JOB, SR, NV, JRO, MW
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