Honorable James B. Frank, Chair, House Committee on Human Services
FROM:
John McGeady, Assistant Director Sarah Keyton, Assistant Director Legislative Budget Board
IN RE:
HB1080 by White (Relating to prior authorization procedures for physical therapy services in Medicaid and the child health plan program.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB1080, As Introduced: a negative impact of ($3,089,924) through the biennium ending August 31, 2021.
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
2020
($340,000)
2021
($2,749,924)
2022
($2,749,924)
2023
($2,749,924)
2024
($2,749,924)
Fiscal Year
Probable (Cost) from GR Match For Medicaid 758
Probable (Cost) from Federal Funds 555
2020
($340,000)
($340,000)
2021
($2,749,924)
($2,749,924)
2022
($2,749,924)
($2,749,924)
2023
($2,749,924)
($2,749,924)
2024
($2,749,924)
($2,749,924)
Fiscal Analysis
The bill would require the Health and Human Services Commission (HHSC) to standardize prior authorization request procedures for physical therapy services in Medicaid and the Children's Health Insurance Program (CHIP). This standardization would include requiring providers to submit prior authorization requests to the Medicaid claims administrator, using a standard form developed by HHSC, who would make a determination regarding the prior authorization and inform the appropriate managed care organization.
The bill would take effect immediately with a two-thirds vote of all members elected to each house; otherwise, the bill would be effective September 1, 2019.
Methodology
According to HHSC, the contract with the claims administrator would need to be amended to account for the increase in prior authorizations they would process. According to HHSC, there would be a one-time cost in fiscal year 2020 of $680,000 in All Funds, including $340,000 in General Revenue, for system modifications and ongoing costs of $5.5 million in All Funds, including $2.7 million in General Revenue, in fiscal year 2021 and subsequent years associated with the increased volume of prior authorizations.
The effect on utilization of therapy services is not known and the associated fiscal impact cannot be determined.
Technology
According to HHSC there would be a one-time cost in fiscal year 2020 of $680,000 in All Funds for system modifications.
Local Government Impact
No fiscal implication to units of local government is anticipated.