LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION April 3, 2011 TO: Honorable Jane Nelson, Chair, Senate Committee on Health & Human Services FROM: John S O'Brien, Director, Legislative Budget Board IN RE:SB797 by Nelson (Relating to objective assessment processes for and appropriate provision of acute nursing services and certain other services provided under the Medicaid program.), Committee Report 1st House, Substituted Estimated Two-year Net Impact to General Revenue Related Funds for SB797, Committee Report 1st House, Substituted: a positive impact of $4,563,563 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.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION
April 3, 2011
TO: Honorable Jane Nelson, Chair, Senate Committee on Health & Human Services FROM: John S O'Brien, Director, Legislative Budget Board IN RE:SB797 by Nelson (Relating to objective assessment processes for and appropriate provision of acute nursing services and certain other services provided under the Medicaid program.), Committee Report 1st House, Substituted
TO: Honorable Jane Nelson, Chair, Senate Committee on Health & Human Services
FROM: John S O'Brien, Director, Legislative Budget Board
IN RE: SB797 by Nelson (Relating to objective assessment processes for and appropriate provision of acute nursing services and certain other services provided under the Medicaid program.), Committee Report 1st House, Substituted
Honorable Jane Nelson, Chair, Senate Committee on Health & Human Services
Honorable Jane Nelson, Chair, Senate Committee on Health & Human Services
John S O'Brien, Director, Legislative Budget Board
John S O'Brien, Director, Legislative Budget Board
SB797 by Nelson (Relating to objective assessment processes for and appropriate provision of acute nursing services and certain other services provided under the Medicaid program.), Committee Report 1st House, Substituted
SB797 by Nelson (Relating to objective assessment processes for and appropriate provision of acute nursing services and certain other services provided under the Medicaid program.), Committee Report 1st House, Substituted
Estimated Two-year Net Impact to General Revenue Related Funds for SB797, Committee Report 1st House, Substituted: a positive impact of $4,563,563 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.
Estimated Two-year Net Impact to General Revenue Related Funds for SB797, Committee Report 1st House, Substituted: a positive impact of $4,563,563 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.
General Revenue-Related Funds, Five-Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds 2012 ($87,630) 2013 $4,651,193 2014 $5,953,638 2015 $7,093,533 2016 $8,157,841
2012 ($87,630)
2013 $4,651,193
2014 $5,953,638
2015 $7,093,533
2016 $8,157,841
All Funds, Five-Year Impact: Fiscal Year Probable Savings/(Cost) fromGeneral Revenue Fund1 Probable Savings/(Cost) fromFederal Funds555 2012 ($87,630) ($788,670) 2013 $4,651,193 $5,746,360 2014 $5,953,638 $7,378,820 2015 $7,093,533 $8,881,065 2016 $8,157,841 $10,273,140
Fiscal Year Probable Savings/(Cost) fromGeneral Revenue Fund1 Probable Savings/(Cost) fromFederal Funds555 2012 ($87,630) ($788,670) 2013 $4,651,193 $5,746,360 2014 $5,953,638 $7,378,820 2015 $7,093,533 $8,881,065 2016 $8,157,841 $10,273,140
2012 ($87,630) ($788,670)
2013 $4,651,193 $5,746,360
2014 $5,953,638 $7,378,820
2015 $7,093,533 $8,881,065
2016 $8,157,841 $10,273,140
Fiscal Analysis
The bill would implement the recommendation in the report, "Implement an Objective ClientAssessment Process for Acute Nursing Services in the Texas Medicaid Program," in the LegislativeBudget Board's Government Effectiveness and Efficiency Report submitted to the Eighty-SecondTexas Legislature, 2011. The bill would amend the Government Code to require the Health and Human Services Commission(HHSC) to develop an objective assessment process, including use of a standard form, for acutenursing services in the Medicaid fee-for-service model and the Medicaid Primary Care CaseManagement managed care model and to take actions to implement the process within the MedicaidSTAR and STAR+PLUS managed care programs. Acute nursing services include home health skillednursing (HHSN) services, home health aide (HHA) services, and private duty nursing (PDN) services.The bill would require that the state employee or contractor who performs the assessment cannot alsodeliver services to the recipient and cannot be affiliated with the person who delivers the services.The bill requires that the assessment be conducted in a timely manner. The bill would allow HHSC to implement an assessment process for Medicaid therapy services comparable to the objective assessment process implemented for Medicaid acute nursing services if HHSC determines that implementing such a process would be feasible and beneficial. Therapy services include occupational, physical, and speech therapy services. The bill would require that HHSC implement an Electronic Visit Verification System by September 1, 2012 if cost-effective and feasible. The purpose of the system is to electronically verify and document through a telephone or computer-based system basic information relating to the delivery of Medicaid acute nursing services. The bill would be effective September 1, 2011.
The bill would implement the recommendation in the report, "Implement an Objective ClientAssessment Process for Acute Nursing Services in the Texas Medicaid Program," in the LegislativeBudget Board's Government Effectiveness and Efficiency Report submitted to the Eighty-SecondTexas Legislature, 2011.
The bill would amend the Government Code to require the Health and Human Services Commission(HHSC) to develop an objective assessment process, including use of a standard form, for acutenursing services in the Medicaid fee-for-service model and the Medicaid Primary Care CaseManagement managed care model and to take actions to implement the process within the MedicaidSTAR and STAR+PLUS managed care programs. Acute nursing services include home health skillednursing (HHSN) services, home health aide (HHA) services, and private duty nursing (PDN) services.The bill would require that the state employee or contractor who performs the assessment cannot alsodeliver services to the recipient and cannot be affiliated with the person who delivers the services.The bill requires that the assessment be conducted in a timely manner. The bill would allow HHSC to implement an assessment process for Medicaid therapy services comparable to the objective assessment process implemented for Medicaid acute nursing services if HHSC determines that implementing such a process would be feasible and beneficial. Therapy services include occupational, physical, and speech therapy services.
The bill would require that HHSC implement an Electronic Visit Verification System by September 1, 2012 if cost-effective and feasible. The purpose of the system is to electronically verify and document through a telephone or computer-based system basic information relating to the delivery of Medicaid acute nursing services.
The bill would be effective September 1, 2011.
Methodology
The bill would result in a cost of $876,300 in All Funds in fiscal year 2012, a savings of $10,397,553 in All Funds in fiscal year 2013, a savings of $13,332,458 in All Funds in fiscal year 2014, a savings of $15,974,598 in All Funds in fiscal year 2015, and a savings of $18,430,981 in All Funds in fiscal year 2016. The cost in fiscal year 2012 includes system development expenses to be incurred by a contractor. The net savings in fiscal year 2013 include a cost of $248,500 for contractor operation costs that include oversight of the subcontractor who performs the assessments, $1,390,884 for contractor asessment costs, and $8,250 for fair hearings, and an offsetting savings of $12,045,187 in client services. The net savings in fiscal year 2014 include a cost of $248,500 for contractor operation costs, $1,627,560 for contractor asessment costs, and $16,500 for fair hearings, and an offsetting savings of $15,225,018 in client services. The net savings in fiscal year 2015 include a cost of $248,500 for contractor operation costs, $1,705,968 for contractor asessment costs, and $16,500 for fair hearings, and an offsetting savings of $17,945,566 in client services. The net savings in fiscal year 2016 include a cost of $248,500 for contractor operation costs, $1,804,704 for contractor asessment costs, and $16,500 for fair hearings, and an offsetting savings of $20,500,685 in client services. The contractor assessment costs are based on the agency's estimate of $357.50 per initial assessment and $242 per reassessment. Savings are based on the agency's estimate that implementing an objective assessment process would save 5 percent of what would have been spent on private duty nursing services in the absence of an objective assessment process. The 5 percent savings estimate is applied to fiscal year 2010 costs for private duty nursing services. Savings data are also based on the agency's estimate that implementing an Electronic Visit Verification System for Medicaid acute nursing services would save 2 percent of what would have been spent on a portion of private duty nursing and personal care services for clients less than 21 years of age in the absence of an Electronic Visit Verification System. Except for the savings estimate for the Electronic Visit Verification System that includes savings on personal care services for clients less than 21 years of age, the remaining cost and savings data are for PDN services provided to clients in Medicaid fee-for-service and the Primary Care Case Management managed care model whose initial assessment is in fiscal year 2013 or later. The data does not include cost and savings estimates for implementing an objective assessment process for clients receiving HHSN services or HHA services because the agency estimates that non-PDN clients account for only 4 percent of acute nursing service costs.
The bill would result in a cost of $876,300 in All Funds in fiscal year 2012, a savings of $10,397,553 in All Funds in fiscal year 2013, a savings of $13,332,458 in All Funds in fiscal year 2014, a savings of $15,974,598 in All Funds in fiscal year 2015, and a savings of $18,430,981 in All Funds in fiscal year 2016.
The cost in fiscal year 2012 includes system development expenses to be incurred by a contractor. The net savings in fiscal year 2013 include a cost of $248,500 for contractor operation costs that include oversight of the subcontractor who performs the assessments, $1,390,884 for contractor asessment costs, and $8,250 for fair hearings, and an offsetting savings of $12,045,187 in client services. The net savings in fiscal year 2014 include a cost of $248,500 for contractor operation costs, $1,627,560 for contractor asessment costs, and $16,500 for fair hearings, and an offsetting savings of $15,225,018 in client services. The net savings in fiscal year 2015 include a cost of $248,500 for contractor operation costs, $1,705,968 for contractor asessment costs, and $16,500 for fair hearings, and an offsetting savings of $17,945,566 in client services. The net savings in fiscal year 2016 include a cost of $248,500 for contractor operation costs, $1,804,704 for contractor asessment costs, and $16,500 for fair hearings, and an offsetting savings of $20,500,685 in client services. The contractor assessment costs are based on the agency's estimate of $357.50 per initial assessment and $242 per reassessment.
Savings are based on the agency's estimate that implementing an objective assessment process would save 5 percent of what would have been spent on private duty nursing services in the absence of an objective assessment process. The 5 percent savings estimate is applied to fiscal year 2010 costs for private duty nursing services. Savings data are also based on the agency's estimate that implementing an Electronic Visit Verification System for Medicaid acute nursing services would save 2 percent of what would have been spent on a portion of private duty nursing and personal care services for clients less than 21 years of age in the absence of an Electronic Visit Verification System.
Except for the savings estimate for the Electronic Visit Verification System that includes savings on personal care services for clients less than 21 years of age, the remaining cost and savings data are for PDN services provided to clients in Medicaid fee-for-service and the Primary Care Case Management managed care model whose initial assessment is in fiscal year 2013 or later. The data does not include cost and savings estimates for implementing an objective assessment process for clients receiving HHSN services or HHA services because the agency estimates that non-PDN clients account for only 4 percent of acute nursing service costs.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 529 Health and Human Services Commission
529 Health and Human Services Commission
LBB Staff: JOB, CL, JI, DM, SD
JOB, CL, JI, DM, SD