TO:	Honorable Lois W. Kolkhorst, Chair, Senate Committee on Health & Human Services

FROM:	Jerry McGinty, Director, Legislative Budget Board

IN RE:	SB26 by Kolkhorst (Relating to local mental health authority and local behavioral health authority audits and mental and behavioral health reporting, services, and programs.), Committee Report 1st House, Substituted

Estimated Two-year Net Impact to General Revenue Related Funds for SB26, Committee Report 1st House, Substituted : a negative impact of ($13,870,821) through the biennium ending August 31, 2025.

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
2024	($4,208,456)
2025	($9,662,365)
2026	($3,881,145)
2027	($990,883)
2028	($991,579)

Fiscal Year	Probable Savings/(Cost) from General Revenue Fund 1	Probable Savings/(Cost) from GR Match For Medicaid 758	Probable Savings/(Cost) from Federal Funds 555	Change in Number of State Employees from FY 2023
2024	($3,651,189)	($557,267)	($563,532)	11.0
2025	($8,910,409)	($751,956)	($766,764)	11.0
2026	($3,347,002)	($534,143)	($548,963)	11.0
2027	($565,499)	($425,384)	($440,215)	11.0
2028	($565,901)	($425,678)	($440,520)	11.0

The bill would establish an innovation grant program for mental health early intervention and treatment and would permit the Health and Human Services Commission (HHSC) to utilize up to five percent of program funding to pay for administration.

The bill would require HHSC to develop a plan by January 1, 2025, for transitioning patients who require a nursing facility level of care and a high level of behavioral health supports and services from behavioral health

services hospitals to nursing facilities. HHSC would be authorized to implement the plan only if it would increase available General Revenue.

The bill would require the Health and Human Services Office of Inspector General (OIG) to conduct performance audits of each local mental health authority (LMHA) and local behavioral health authority (LBHA) at least once every ten years.

The bill would require LMHAs to be responsible for the transition of patients from HHSC facilities and would require LMHAs to provide services to complement discharge planning efforts.

The bill would authorize a facility administrator of an inpatient mental health facility to only approve a voluntary admission for inpatient services if there is available space at the inpatient mental health facility.

The bill would require HHSC to establish and maintain a public reporting system of performance and outcome measures to compare LMHAs, LBHAs, and local intellectual and developmental disability authorities (LIDDA), that includes specific measures to be posted monthly, or as frequently as possible.

The cost estimate does not include funding required to provide innovation grants for community-based initiatives. HHSC would require appropriations to implement the grant program, but the cost for grant funding would depend on the preferred scale of the program. Other community mental health grant programs at HHSC received appropriations ranging from $5.0 million to $25.0 million for grants each fiscal year of the 2022-23 biennium. The analysis assumes costs for grant program administration would be a portion of the total program funding as authorized by the bill.

The analysis assumes HHSC would utilize existing resources to develop the required plan for transitioning certain patients from behavioral health services hospitals to nursing facilities.

The analysis assumes OIG would require 9.0 additional FTEs, including a project manager and eight auditors, to conduct performance audits of LMHAs and LBHAs, which would result in a cost of $1.2 million per fiscal year.

It is assumed that the provisions of the bill relating to voluntary admission to an inpatient mental health facility could be absorbed within existing resources.

The analysis assumes HHSC would require 2.0 FTEs, including a Project Manager III and Data Analyst IV, to implement the new requirements for a monthly public reporting system at a cost of $0.3 million in fiscal year 2024 and $0.2 million in subsequent fiscal years. According to HHSC, technology costs for system development and licensing for the updated public reporting system would be $3.3 million in fiscal year 2024, $9.0 million in fiscal year 2025, and $3.0 million in fiscal year 2026.

The analysis assumes local entities would have a negative fiscal impact relating to implementing the provisions of the bill. Costs for local entities are not included in the tables above though HHSC does provide funding for LMHAs and LBHAs through performance contracts.

Based on information provided by HHSC, the analysis assumes LMHAs and LBHAs would have an increase in costs of $4.1 million per fiscal year for additional staffing needs to provide services related to discharge planning efforts. In addition, the analysis assumes that LMHAs and LBHAs would have costs of $3.0 million in fiscal year 2024, $1.5 million in fiscal year 2025, and $0.5 million in fiscal year 2025 related to assisting providers with collecting and reporting new data requirements for the public reporting system.

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 88TH LEGISLATIVE REGULAR SESSION


April 2, 2023