| TO: | Honorable David Dewhurst, Lieutenant Governor, Senate |
| FROM: | John S. O'Brien, Director, Legislative Budget Board |
| IN RE: | SB531 by Patrick, Dan (Relating to the billing coordination system for claims submitted for payment from the Medicaid program.), As Passed 2nd House |
| Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
|---|---|
| 2010 | $7,500,000 |
| 2011 | $7,500,000 |
| 2012 | $7,500,000 |
| 2013 | $7,500,000 |
| 2014 | $7,500,000 |
| Fiscal Year | Probable Revenue Gain from Medicaid Program Income 705 |
Probable (Cost) from Medicaid Program Income 705 |
Probable Savings from GR Match For Medicaid 758 |
|---|---|---|---|
| 2010 | $7,500,000 | ($7,500,000) | $7,500,000 |
| 2011 | $7,500,000 | ($7,500,000) | $7,500,000 |
| 2012 | $7,500,000 | ($7,500,000) | $7,500,000 |
| 2013 | $7,500,000 | ($7,500,000) | $7,500,000 |
| 2014 | $7,500,000 | ($7,500,000) | $7,500,000 |
The bill would amend Section 531.02413, Government Code, to require the Health and Human Services Commission (HHSC) to expand the Medicaid Billing Coordination System (BCS), if cost effective and feasible, and to process claims for all other health care services provided through the Medicaid program in the manner claims for acute care services are currently processed by the system. However, this would not apply if claims were being processed by an alternative billing coordination system prior to September 1, 2009.
The bill outlines requirements of third-party health insurers with regard to Medicaid enrollees and documents other administrative requirements related to Medicaid reclamation activities.
The bill would require HHSC to provide reimbursement under the state Medicaid program to a licensed pharmacist who is authorized to administer immunizations in accordance with rules adopted by the Board of Pharmacy and who administers an immunization to a Medicaid enrollee to the same extent a physician or other health care provider is reimbursed.
HHSC assumes that the language referring to processing claims would exclude services provided under managed care, since managed care payments to providers are not processed through the Texas Medical Healthcare Partnership (TMHP) acute care claims system. A Medicaid BCS is already in place for other types of service delivery, including fee-for-service, primary care case management, and pharmacy claims. Therefore, HHSC assumes no significant fiscal impact.
The Department of Aging and Disability Services (DADS) states that the agency is currently using an alternative BCS for the Home and Community-based Services program and the Texas Home Living Waiver program. Other long-term care Medicaid programs are currently processed by TMHP, but based on additional information obtained by DADS, TMHP would require significant system changes in order to change to a cost avoidance BCS. These costs would be approximately $2.5 million in FY 2010, $1.4 million in FY 2011 and $1.1 million in FY 2012-13.
Also, DADS estimates an increase in the operating costs of using a cost avoidance BCS, without a significant increase in third party recoveries. This is because most Medicaid recipients are not able to purchase Medicare supplemental insurance or long-term care insurance and thus do not have a third party that DADS could bill. Since the costs are projected to outweigh the potential recoveries, these actions are deemed by DADS to not be cost-effective. Therefore, DADS would not implement this provision of the bill and estimates no significant fiscal impact.
According to HHSC, states are required to aggressively pursue third-party sources of payment for Medicaid recipients. HHSC indicates that if states comply with the Deficit Reduction Act, they are permitted to retain 10 percent more of fraudulent claims than they can retain currently. HHSC estimates additional collections of $7.5 million each year of Medicaid Program Income; it is assumed this additional revenue would be expended for Medicaid client services, resulting in an equal savings to General Revenue Match for Medicaid.
HHSC assumes that the section of the bill on pharmacist reimbursement would require systems changes, training, provider education and coordination, as well as revision to the Medicaid State Plan. HHSC assumes that any cost associated with these changes could be absorbed within existing resources. It is assumed that if the Board of Pharmacy needed to adopt rules, the cost could be absorbed within existing resources.
| Source Agencies: | 529 Health and Human Services Commission, 539 Aging and Disability Services, Department of
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| LBB Staff: | JOB, CL, MB, LR
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