| TO: | Honorable Joe Straus, Speaker of the House, House of Representatives |
| FROM: | Ursula Parks, Director, Legislative Budget Board |
| IN RE: | HB2550 by Patrick, Diane (Relating to the consolidation of the Higher Education Enrollment Assistance Program and the Higher Education Assistance Plan and the transfer of certain enrollment assistance duties to institutions of higher education. ), As Passed 2nd House |
| Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
|---|---|
| 2014 | ($19,989,928) |
| 2015 | ($37,954,928) |
| 2016 | ($64,704,092) |
| 2017 | ($83,264,092) |
| 2018 | ($95,634,092) |
| Fiscal Year | Probable Savings/(Cost) from General Revenue Fund 1 |
Probable Savings/(Cost) from Physician Ed. Loan Repayment 5144 |
|---|---|---|
| 2014 | ($19,989,928) | $0 |
| 2015 | ($37,954,928) | ($3,125,000) |
| 2016 | ($64,704,092) | ($7,500,000) |
| 2017 | ($83,264,092) | ($13,125,000) |
| 2018 | ($95,634,092) | ($20,000,000) |
| Fiscal Year | Change in Number of State Employees from FY 2013 |
|---|---|
| 2014 | 2.0 |
| 2015 | 2.0 |
| 2016 | 3.0 |
| 2017 | 3.0 |
| 2018 | 3.0 |
The bill includes a provision relating to the consolidation of the Higher Education Enrollment Assistance Program and the Higher Education Assistance Plan and the transfer of certain enrollment assistance duties to institutions of higher education. The bill requires institution of higher education in closest geographic proximity to a public high school in the state identified by the Higher Education Coordinating Board as substantially below the state average in number of graduates who enroll in higher education institutions shall enter into an agreement with that high school to develop a plan to increase the number of students from that high school enrolling in higher education institutions.
The bill would require the Higher Education Coordinating Board (THECB) to establish the Resident Physician Expansion Grant Program. Under provisions of the bill, THECB would award grants to physician residency programs at teaching hospitals and other appropriate health care entities according to program criteria established in the bill. A grant award may be used only to pay direct costs associated with the position, including the salary of the resident position. THECB would provide grants only to support residency positions that are created and accredited on or after January 1, 2014 or were created and accredited before January 1, 2013, but as of that date had not yet been filled. THECB would be required to submit information regarding the program to the governor, lieutenant governor, the speaker of the house of representatives, the standing committee of the senate and house of representatives with responsibility for oversight of health and human services issues, and the Legislative Budget Board by January 1st of each year.
The bill would require the Higher Education Coordinating Board (THECB) to award certain grants to entities in the state for graduate medical education residency expansion. Under provisions of the bill, THECB would award one-time planning grants for entitites that have never had a graduate medical education program and are eligible for Medicare funding of graduate medical education. The grants would be awarded on a competitive basis. The bill would require THECB to award grants for unfilled residency positions and for program expansion or new programs. These grants would have to be expended to support the direct resident costs to the program, including the resident stipend and benefits. The bill also includes provisions regarding the prioritizing of certain grants and would allow for grants for additional years of residency. THECB would determine the number of the grants awarded and the amount of each grant.
The bill would require THECB to establish the Primary Care Innovation Program. Under this program, THECB would award incentive payments to medical schools that develop innovative programs designed to increase the number of primary care physicians in the state. In addition to money appropriated by the legislature, THECB may accept gifts, grants and donations for the purpose of these programs and may use a reasonable amount, not to exceed three percent, to pay administrative costs.
The bill amends the Physician Education Loan Repayment Program to include physicians that provide health care services in a location other than a health professional shortage area to a designated number of patients who are recipients under the medical assistance program authorized under Chapter 32 of the Human Resources Code or the Texas Woman's Health Program (TWHP) according to criteria established by the board in consultation with the Health and Human Services Commission (HHSC). Funds would be allocated to these eligible physicians after funds have been allocated to physicians qualifying under the current program. HHSC would need to develop policy and procedures for verifying the number of Medicaid and/or TWHP clients certain physicians have served and work with THECB to establish the number of Medicaid and TWHP recipients physicians need to see to receive funding and verify physicians meet the established criteria. The board would be required to enter an memorandum of understanding requiring this provision no later than October 1, 2013.
For purposes of this fiscal note it is assumed, any costs associated with the consolidation of the consolidation of the Higher Education Enrollment Assistance Program and the Higher Education Assistance Plan and the transfer of certain enrollment assistance duties to institutions of higher education would be absorbed within current resources.
Below is information regarding the remaining provisions of the bill. This fiscal note includes cost estimates for the Resident Physician Expansion Grant Program, the three Graduate Medical Education Residency Expansion Programs, including planning grants, and the Primary Care Innovation Program and estimates tied to changes to the Physician Education Loan Repayment Program
For costs associated with the planning grants, it is assumed that ten grants in the amount of $150,000 per year would be awarded to eligible medical schools, teaching hospitals, and appropriated health care entities to investigate the costs and feasibility of developing accredited physician residency programs at hospitals that have not previously offered residency programs beginning in fiscal year 2014.
For costs associated with the grants for the remaining Graduate Medical Education Residency expansion programs and the Resident Physician Expansion Grant Program, it is assumed that there would be an entering cohort in each year to achieve a 1.1 to 1 ratio of Texas first-year entering positions to medical school graduates. Based on information provided by the Higher Education Coordinating Board (THECB), the programs will admit 220 resident physicians in Fiscal Year 2014, and will admit 339 resident physicians in fiscal year 2015. Beginning in fiscal year 2016 it is estimated 348 resident physicians would enter the program each year. For purposes of this fiscal note is assumed the award amount would be $65,000 per year to cover costs associated with the Resident Physician Expansion Program and the Graduate Medical Education Residency expansion programs, which included resident stipend and benefits. Funding for each residency would be maintained for four years. Based on these assumptions costs associated with the program would be $14.3 million (220 X $65,000) in fiscal year 2014, $36.3 million in fiscal year 2015 (339 X $65,000 and 220 X $65,000). The costs would increase to $59.0 million in fiscal year 2016, $81.6 million in fiscal year 2017 and $89.9 million in fiscal year 2018.
For purposes of this fiscal note, it is assumed that four $1 million, two year grants would be used to support the Primary Care Innovation Program. Costs associated with this program would be $4 million in fiscal year 2014, 2016 and 2018.
It is assumed the changes to the Physician Education Loan Repayment Program, would allow 125 new participants in the program. This analysis was based on a similar program, the Children's Medicaid Loan Repayment Program, which was last funded in the 2010-11 biennium. Based on the statutorily defined award amounts for the program of $25,000 for the first year, $35,000 for the second year and $45,000 and $55,000 respectively for the third and fourth year, there would be costs of $3.1 million (125 X $25,000) in fiscal year 2015 in general revenue-dedicated Fund 5144, Physician Education Loan Repayment Program Account. It is also assumed that these physicians would participate in the program for all four years. Beginning in fiscal year 2016, the costs would increase to $7.5 million as a new cohort of 125 is added ($3.1 million) and participants already in the program would receive awards of $35,000 ($4.4 million). The costs would increase as more cohorts are added and participants already in the program receive larger award amounts for the third and fourth year of service.
The cost to the Coordinating Board would be in the additional staff required to administer the new programs in the bill. One Program Director and one Administrative Assistant III would initially be required to implement and maintain the new programs, expanding to include a second Program Director in fiscal year 2016. The total cost for the two FTES, including salary and benefits, is estimated to be $119,928. Beginning in fiscal year 2016, the second program director would be required to administer, manage and monitor the grants. The total costs beginning in fiscal year 2016 for the three FTEs is $189,092. There would also be $50,000 in professional services in the first year of each biennium (2014, 2016 and 2018) associated with contracting with reviewers to evaluate grant proposals under the Primary Care Innovation Program and to hire out of state, nationally recognized experts in graduate medical education to help ensure that the programs are developed appropriately.
| Source Agencies: | 701 Central Education Agency, 710 Texas A&M University System Administrative and General Offices, 720 The University of Texas System Administration, 758 Texas State University System, 768 Texas Tech University System Administration, 781 Higher Education Coordinating Board, 783 University of Houston System Administration, 769 University of North Texas System Administration, 529 Health and Human Services Commission
|
| LBB Staff: | UP, KK, SK, GO, DEH, ES
|