| TO: | Honorable Helen Giddings, Chair, House Committee on Business & Industry |
| FROM: | John S. O'Brien, Director, Legislative Budget Board |
| IN RE: | SB929 by Jackson, Mike (Relating to reimbursement procedures and to the resolution of certain medical disputes regarding workers' compensation claims.), As Engrossed |
| Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
|---|---|
| 2008 | $0 |
| 2009 | $0 |
| 2010 | $0 |
| 2011 | $0 |
| 2012 | $0 |
| Fiscal Year | Probable (Cost) from DEPT INS OPERATING ACCT 36 |
Probable Revenue Gain from DEPT INS OPERATING ACCT 36 |
|---|---|---|
| 2008 | ($1,897,585) | $1,897,585 |
| 2009 | ($816,385) | $816,385 |
| 2010 | ($816,385) | $816,385 |
| 2011 | ($816,385) | $816,385 |
| 2012 | ($816,385) | $816,385 |
The bill would amend the Labor Code to provide a new appeal process for workers' compensation medical dispute cases at the State Office of Administrative Hearings (SOAH) and provides for this process as a prerequisite for district court appeals. In addition, the bill would dismiss all pending medical dispute court cases without prejudice and give the disputing party the ability to obtain a hearing at SOAH. The bill would take effect September 1, 2007.
It is assumed the Texas Department of Insurance (TDI) and the Office of Injured Employee Counsel (OIEC) would incur costs associated with performing the duties and responsibilities of the provisions of the bill.
In fiscal years 2002 through 2004 SOAH received an annual average of 1,420 medical dispute cases from the Texas Workers' Compensation Commission. Based on the analysis of TDI, it is assumed that the bill would result in 925 medical dispute cases being referred each fiscal year from the Division of Workers' Compensation (DWC) at TDI. Based on the analysis of TDI, it is assumed each medical dispute case would take an average of 6 hours at SOAH and TDI would be billed $100 per hour for SOAH's costs. Under these assumptions TDI would pay SOAH $555,000 each fiscal year by interagency contract for these cases.
Additionally, there are currently 1,802 medical dispute cases pending in court. It is assumed these cases would be remanded to SOAH and billed to TDI. It is assumed each case would take an average of 6 hours at SOAH and TDI would be billed $100 per hour for SOAH's costs. Under these assumptions TDI would pay SOAH $1,081,200 in 2008 by interagency contract for these cases.
It is assumed OIEC would not incur costs from the 1,802 cases that would be remanded from court to SOAH in 2008 but would incur costs for the 925 cases per year referred to SOAH from DWC. Based on the analysis of OIEC, it is assumed costs at OIEC would include salaries for 5.0 FTEs, four Ombudsman I and one Administrative Assistant II, in the amount of $166,328 each fiscal year with associated benefit costs of $47,054. It is assumed costs would include the reclassification of an existing Ombudsman I position to a Program Specialist II position which would include additional salary of $4,653 and associated benefit costs of $1,316. Other costs and operating expenses, including travel, printing, and Adjuster's License fees are assumed to be $42,034 each fiscal year.
Since TDI is required to generate revenues equivalent to its and OIEC's costs of operation under current law, this analysis assumes that all costs incurred in excess of revenues generated would be paid for from General Revenue - Dedicated Fund 36 from either existing fund balances or insurance maintenance tax revenue.
| Source Agencies: | 454 Department of Insurance
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| LBB Staff: | JOB, JRO, KJG, MW, SK
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