Honorable Patrick M. Rose, Chair, House Committee on Human Services
FROM:
John S. O'Brien, Director, Legislative Budget Board
IN RE:
HB2555 by Kolkhorst (Relating to licensing, regulation, and reporting regarding certain facilities providing personal care to persons with disabilities; providing penalties.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB2555, As Introduced: a negative impact of ($42,473,070) through the biennium ending August 31, 2009.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
Fiscal Year
Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2008
($20,852,855)
2009
($21,620,215)
2010
($20,678,322)
2011
($23,143,316)
2012
($22,386,548)
Fiscal Year
Probable (Cost) from GENERAL REVENUE FUND 1
Probable (Cost) from GR MATCH FOR MEDICAID 758
Probable (Cost) from FEDERAL FUNDS 555
Probable Revenue Gain from GENERAL REVENUE FUND 1
2008
($1,603,335)
($21,760,664)
($1,603,334)
$2,511,144
2009
($1,631,728)
($20,897,513)
($1,631,730)
$909,026
2010
($1,823,865)
($21,539,395)
($1,823,866)
$2,684,938
2011
($2,041,114)
($22,197,799)
($2,041,114)
$1,095,597
2012
($2,290,470)
($22,982,158)
($2,290,470)
$2,886,080
Fiscal Year
Change in Number of State Employees from FY 2007
2008
354.3
2009
369.8
2010
386.1
2011
403.5
2012
422.1
Fiscal Analysis
The bill would amend Title 4, Health and Safety Code, by adding Chapter 254, Group Home Facilities, to the Department of Aging and Disability Services’ (DADS) responsibilities in licensing and regulation. The bill sets forth various statutory requirements for the facilities. Some of the requirements include licensure and license denial; suspension and revocation; surveys; inspections and investigations by DADS; and enforcement. The Group Home Facilities would not be required to be licensed before January 1, 2008.
The bill provides the Office of the Attorney General (OAG) the ability to collect civil penalties for violations and to seek temporary restraining orders on the Department’s behalf.
Methodology
DADS estimated the number of group homes that would have to be licensed based on the ratio of the number of group homes registered by the City of El Paso (100) compared to the number of assisted living facilities (ALF) in El Paso licensed by the state (46), a ratio of 2.17. Multiplying the statewide number of licensed ALFs (1,445) by that ratio yields 3,141. DADS then applied the historical annual growth rate in the number of assisted living facilities of 3.27 percent, which resulted in a projected number of group home facilities of 3,244 for fiscal year (FY) 2008, 3,350 for FY 2009, 3,460 for FY 2,010, 3,573 for FY 2,011, and 3,690 for FY 2,012.
DADS indicated that Home and Community-Based Services (HCS) homes are currently certified but not licensed. For the number of HCS facilities impacted, DADS determined that as of February 2, 2007, 166 of the 4,243 foster care homes serve three or more individuals and therefore would have to be licensed. In addition, 964 of the 1,412 HCS group homes open as of the same date serve three or four individuals and would have to be licensed, for a combined total of 1,130 facilities that would need to be licensed as group homes. DADS then applied the historical annual growth rate of 12.26 percent, which resulted in a projected number of HCS-related licensed group home facilities of 1,269 for FY 2008, 1,425 for FY 2009, 1,600 for FY 2010, 1,796 for FY 2011, and 2,016 for FY 2012.
For Assisted Living Facilities, DADS assumed that the administrative costs incurred would most closely resemble the annual regulatory costs per facility that DADS is currently experiencing for the Intermediate Care Facilities - Mental Retardation (ICF/MR) program, since that program has a high concentration of small facilities. DADS indicated that annual costs/FTEs per ICF/MR facility are: $4,197.56 for Salary, $520.42 for Travel, 0.095 FTES per facility. For the HCS group homes, DADS assumed the incremental costs of licensing the facilities would approximate the per facility costs experienced for Assisted Living Facilities of $1,457.77 for salary, $118.30 for travel, and .034 FTES. In addition to those costs, DADS included first year "set-up" costs, as well as standard recurring direct and indirect overhead costs, and fringe.
The Office of the Attorney General indicated that the bill would result in additional cases filed by the OAG’s Consumer Protection and Public Health Division. OAG review assessed that the bill does not give any entity other than the OAG ability to collect civil penalties for violations, or to seek a temporary restraining order on the DADS behalf. The OAG last year received 10 referrals for enforcement action related to licensed and/or unlicensed assisted living facilities (ALFs). The County Attorney’s Office in Harris County had received at least thirty five referrals last year, many of them requiring temporary restraining orders to remove residents who were in immediate danger.
Based on the referrals to OAG and the County Attorney’s Office in Harris County actions in fiscal year 2006 for ALFs the OAG has assumed a comparable number of referrals, with referrals being made exclusively to the OAG. The OAG estimated the fiscal impact in fiscal year 2008 to be $290,782 (plus three FTEs) and $268,667 (and FTEs) each fiscal year thereafter from the General Revenue Fund.
Technology
DADS indicated that the bill would require modifications to the Compliance Assessment, Regulatory & Enforcement Systems system, Central Data Repository, and the Web Accessible Facility Enrollment. DADS estimated that 6,900 hours of programming would be needed at a cost of $82 per hour. DADS estimated total cost for technology would be $565,800.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.
Source Agencies:
302 Office of the Attorney General, 304 Comptroller of Public Accounts, 529 Health and Human Services Commission, 539 Aging and Disability Services, Department of