82(R) SB 8 - Introduced version

Fiscal Year	Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2012	$0
2013	$0
2014	$0
2015	$0
2016	$0

Fiscal Year	Probable (Cost) from Dept Ins Operating Acct 36	Probable Revenue Gain from Dept Ins Operating Acct 36	Probable (Cost) from Insurance Maint Tax Fees 8042	Probable Revenue Gain from Insurance Maint Tax Fees 8042
2012	($321,539)	$321,539	($214,359)	$214,359
2013	($429,218)	$429,218	($286,145)	$286,145
2014	($429,820)	$429,820	($286,547)	$286,547
2015	($430,432)	$430,432	($286,955)	$286,955
2016	($431,064)	$431,064	($287,376)	$287,376

Fiscal Year	Change in Number of State Employees from FY 2011
2012	6.4
2013	8.5
2014	8.5
2015	8.5
2016	8.5

SECTION 2.01 would create the Texas Institute of Health Care Quality and Efficiency (the Institute) and attach it to the Health and Human Services Commission (HHSC). The Institute would be governed by a 15-member board and would also include non-voting members from the Department of State Health Services (DSHS), HHSC, the Texas Department of Insurance (TDI), the Employees Retirement System of Texas (ERS), the Teacher Retirement System of Texas (TRS), and other representatives as determined by the governor. Board members would serve without compensation. The bill would authorize the Institute to be funded through the General Appropriations Act and to engage in revenue-generating activity as appropriate, and would require state agencies represented on the board to provide funds to support the Institute based on a funding formula devised by HHSC. The Institute would be required to create a state plan to improve the quality and efficiency of health care delivery and produce various reports by December 1, 2012.

SECTIONS 2.02 and 2.03 would abolish the Texas Health Care Policy Council at the Office of the Governor and transfer any unexpended and unobligated balances appropriated to the Council before the effective date of the Act to the Institute.

SECTION 3.01 would authorize formation of a health care collaborative and require a collaborative to hold a certificate of authority issued by TDI. The bill would authorize TDI to adopt rules regarding regulation of health care collaboratives and to collect application, annual, and examination fees. The bill would impose reporting requirements on collaboratives, provide TDI with the authority to examine the financial affairs and operation of collaboratives, and provide the agency with enforcement authority.

SECTION 4.01 would require DSHS to coordinate with hospitals to develop, implement, and enforce a standardized patient risk identification system. The executive commissioner of HHSC would be required to appoint an ad hoc committee of hospital representatives to assist in its development.

SECTIONS 5.03 and 5.04 would enable the executive commissioner of HHSC to designate the federal Centers for Disease Control (CDC) and Prevention�s National Healthcare Safety Network (NHSN), or its successor, to receive reports of health care-associated infections and preventable adverse events from health care facilities on behalf of DSHS and require facilities to provide DSHS with access to reports. SECTION 5.10 would allow DSHS to disclose information to the CDC and other federal agencies designated by the executive commissioner of HHSC.

SECTION 5.05 would expand the items DSHS is required to publicly report under Chapter 98 of the Health and Safety Code to include potentially preventable complications and potentially preventable readmissions and require DSHS to study adverse health conditions in long-term care facilities and make recommendations.

SECTION 5.08 would require DSHS in consultation with the Institute to develop a recognition program for exemplary health care providers and facilities.

SECTIONS 6.01-6.06 would require DSHS to collect hospital data in the format developed by the American National Standards Institute, or its successor, and allow DSHS to disclose any data collected under the purview of the former Health Care Information Council and not included in public use data to any program within DSHS if it is reviewed and approved by the institutional review board. The bill would require rural providers to meet the reporting requirements in Chapter 108 of the Health and Safety Code.

This analysis assumes all rulemaking at HHSC could be accomplished within existing resources.

SECTIONS 2.01 � 2.03: According to HHSC, the dissolution of the Texas Health Care Policy Council and formation of the Institute would result in a neutral fiscal impact to the state. The agencies currently contributing funding to the Council would contribute the same amount to HHSC via interagency contract for operation of the Institute. According to HHSC, the agency would require two new full-time equivalents (FTEs), but these FTEs would not represent a net increase in state FTEs due to dissolution of the Council at the Office of the Governor.

This analysis assumes the duties related to selection of nominees to serve on the Institute�s board can be accomplished within existing resources at the Office of the Governor.

SECTION 3.01: TDI indicates the agency will require 8.5 full-time equivalents to implement the provisions of the bill, at a cost of $1,251,262 for fiscal years 2012-13 (costs are phased-in for year 2012 and include salaries, benefits, travel, and other operating expenses). Based on the assumption that 25 health care collaboratives would apply for licensure per year in fiscal years 2012 to 2015, the agency indicates it would require 1.5 attorneys to provide legal and support services, 2 Program Specialists to process licensure applications, 2 Insurance Specialists to conduct examinations of applicants, 1 financial examiner to conduct qualifying examinations, 1 actuary to perform actuarial reserve analysis, and 1 financial examiner to conduct financial analysis reviews.

Because the bill does not specify the amount of the fees and the number of health care collaboratives seeking a certificate of authority from TDI is unknown, the Comptroller of Public Accounts could not estimate the fee revenue gain. However, because TDI indicates it would use funds from General Revenue-Dedicated Texas Department of Insurance Fund 36 and General Revenue � Insurance Maintenance Tax and Insurance Department Fees in the implementation of the bill�s requirements, both self-leveling accounts, this analysis assumes there would be no net fiscal impact to TDI to implement the bill. Since both funds are self-leveling accounts, this analysis also assumes that any additional revenue resulting from the implementation of the bill would accumulate in the account fund balances and that the department would adjust the assessment of the maintenance tax or other fees accordingly in the following year.

SECTION 4.01: According to DSHS, development of a standardized patient risk identification system would not have a significant fiscal impact.

SECTIONS 5.03 and 5.04: DSHS indicates the reporting requirements related to NHSN would not have a significant fiscal impact.

SECTION 5.05: Assuming availability of data, DSHS indicates the additional public reporting of data and study of adverse health conditions that occur in long-term care facilities would not have a significant fiscal impact.

SECTION 5.08: DSHS assumes there is no significant fiscal impact to develop the recognition program.

SECTIONS 6.01-6.06: DSHS assumes there is no significant fiscal impact related to the disclosure of data collected under Chapter 108. The agency assumes the additional reporting from rural providers would result in a cost, as the agency contracts for data collection under Chapter 108, but that the cost could be absorbed within existing resources.

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION


March 28, 2011

TO:	Honorable Jane Nelson, Chair, Senate Committee on Health & Human Services

FROM:	John S O'Brien, Director, Legislative Budget Board

IN RE:	SB8 by Nelson (Relating to improving the quality and efficiency of health care.), As Introduced