Honorable Lois W. Kolkhorst, Chair, House Committee on Public Health
FROM:
John S O'Brien, Director, Legislative Budget Board
IN RE:
HB392 by Gonzales, Veronica (Relating to a county's eligibility to receive state assistance for health care expenditures that exceed eight percent of the county's general revenue levy for the year.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB392, As Introduced: a negative impact of ($915,600) through the biennium ending August 31, 2013.
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
2012
($457,800)
2013
($457,800)
2014
($457,800)
2015
($457,800)
2016
($457,800)
Fiscal Year
Probable Savings/(Cost) from General Revenue Fund 1
2012
($457,800)
2013
($457,800)
2014
($457,800)
2015
($457,800)
2016
($457,800)
Fiscal Analysis
The bill amends Section 61.037, Health and Safety Code, to allow any payments made by a county for health care services provided through Medicaid, including direct reimbursement to health care providers and indirect reimbursement through transfers of funds to the state for health care services provided through Medicaid, to be included as part of the county’s eight percent general revenue tax levy expenditure level to qualify for state assistance funds.
Methodology
The bill would allow counties to include Medicaid payments, including the amount of matching funds transferred for the Upper Payment Limit (UPL) program for the support of the Medicaid population, as part of their eight percent expenditure level to qualify for state assistance funds. This could result in additional counties expending eight percent of their general revenue tax levy on indigent/Medicaid-eligible health care, and thus becoming eligible for state reimbursement for these services. This may also cause counties to expend eight percent of their general revenue tax levy more quickly in a fiscal year, which could result in more health care costs qualifying for state reimbursement.
Based on data from the Health and Human Services Commission (HHSC), 17 counties currently transfer local funds to the UPL program. By comparing the expenditures and eight percent tax levy amounts reported on the 2010 County Expenditure Report to the UPL data from HHSC, the Department of State Health Services (DSHS) estimates that two additional counties will be eligible for state reimbursement if inclusion of their Medicaid expenditures results in total expenditures exceeding eight percent of their general revenue tax levy. Based on the2010 average cost per county estimate of $228,900 from DSHS, the cost to serve these two additional counties would be $457,800 in each fiscal year. This analysis assumes constant health care costs for fiscal years 2012 – 2016.
It is assumed that any additional administrative costs associated with the additional counties being eligible for state reimbursement can be absorbed within existing DSHS resources.
Local Government Impact
The bill would amend the Health and Safety Code allowing a county to receive state assistance for payments made for health care services provided through Medicaid that exceed eight percent of a county’s annual general revenue levy. Currently, only funds used towards providing health care services to the indigent population not eligible for Medicaid are counted towards the eight percent threshold.
The eleven counties that have historically received funds prior to this bill will have less available monies if additional counties may use their UPL contributions to meet the eight percent expenditure and receive state funds.
The bill could result in a positive fiscal impact to counties providing more services to eligible residents as defined by the provisions of the bill.
Source Agencies:
529 Health and Human Services Commission, 537 State Health Services, Department of