LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION April 25, 2025 TO: Honorable Lois W. Kolkhorst, Chair, Senate Committee on Health & Human Services FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: SB547 by Menndez (Relating to notice from a health benefit plan issuer regarding a physician s or health care provider s preauthorization exemption status.), Committee Report 1st House, Substituted Estimated Two-year Net Impact to General Revenue Related Funds for SB547, Committee Report 1st House, Substituted: an impact of $0 through the biennium ending August 31, 2027. 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 toGeneral Revenue Related Funds2026$02027$02028$02029$02030$0All Funds, Five-Year Impact: Fiscal Year Probable Savings/(Cost) fromDept Ins Operating Acct36 Probable Revenue Gain/(Loss) fromDept Ins Operating Acct362026($1,000,000)$1,000,0002027($250,000)$250,0002028($250,000)$250,0002029($250,000)$250,0002030($250,000)$250,000 Fiscal AnalysisThe bill would amend the Texas Insurance Code to require the Texas Department of Insurance (TDI) to establish a comprehensive database to record preauthorization exemption grants, denials, rescissions, and determinations resulting from internal appeals and independent reviews conducted by health maintenance organizations (HMOs) or insurers. HMOs and insurers would be required to provide a written notice to TDI no later than the tenth day after a relevant action. The bill would take effect September 1, 2025.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION
April 25, 2025
TO: Honorable Lois W. Kolkhorst, Chair, Senate Committee on Health & Human Services FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: SB547 by Menndez (Relating to notice from a health benefit plan issuer regarding a physician s or health care provider s preauthorization exemption status.), Committee Report 1st House, Substituted
TO: Honorable Lois W. Kolkhorst, Chair, Senate Committee on Health & Human Services
FROM: Jerry McGinty, Director, Legislative Budget Board
IN RE: SB547 by Menndez (Relating to notice from a health benefit plan issuer regarding a physician s or health care provider s preauthorization exemption status.), Committee Report 1st House, Substituted
Honorable Lois W. Kolkhorst, Chair, Senate Committee on Health & Human Services
Honorable Lois W. Kolkhorst, Chair, Senate Committee on Health & Human Services
Jerry McGinty, Director, Legislative Budget Board
Jerry McGinty, Director, Legislative Budget Board
SB547 by Menndez (Relating to notice from a health benefit plan issuer regarding a physician s or health care provider s preauthorization exemption status.), Committee Report 1st House, Substituted
SB547 by Menndez (Relating to notice from a health benefit plan issuer regarding a physician s or health care provider s preauthorization exemption status.), Committee Report 1st House, Substituted
Estimated Two-year Net Impact to General Revenue Related Funds for SB547, Committee Report 1st House, Substituted: an impact of $0 through the biennium ending August 31, 2027. 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 SB547, Committee Report 1st House, Substituted: an impact of $0 through the biennium ending August 31, 2027. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
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:
2026 $0
2027 $0
2028 $0
2029 $0
2030 $0
All Funds, Five-Year Impact:
2026 ($1,000,000) $1,000,000
2027 ($250,000) $250,000
2028 ($250,000) $250,000
2029 ($250,000) $250,000
2030 ($250,000) $250,000
Fiscal Analysis
The bill would amend the Texas Insurance Code to require the Texas Department of Insurance (TDI) to establish a comprehensive database to record preauthorization exemption grants, denials, rescissions, and determinations resulting from internal appeals and independent reviews conducted by health maintenance organizations (HMOs) or insurers. HMOs and insurers would be required to provide a written notice to TDI no later than the tenth day after a relevant action. The bill would take effect September 1, 2025.
The bill would take effect September 1, 2025.
Methodology
Based upon analysis provided by the Department of Insurance, this estimate assumes approximately 30 healthcare plans will be required to submit data to comply with the reporting requirements. Due to the large volume of providers and specialties within these healthcare plans, the agency anticipates a significant number of data that would be submitted and processed by the agency. This estimate assumes that this increase in the amount of records processing cannot be absorbed with current technological resources and the agency would require a new reporting system database. The agency anticipates that this new database will have an initial one-time cost of $1,000,000, with $250,000 in annual ongoing maintenance costs.Appropriations made to implement the provisions of the bill would be appropriated from the Texas Department of Insurance Operating Account Fund 36. This account is a self-leveling account, and any expenditure increases would be reflected in the annual adjustment of the maintenance tax rates for insurance carriers. Therefore, the overall revenue into the account will equal expenses.
Technology
To implement the provisions of the bill, this estimate assumes the agency will require a separate reporting system and processing database. This estimate assumes that TDI will work with a third-party vendor to create the database with secure profile, data submission, data management, and data querying functionalities.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: b > td > 454 Department of Insurance
454 Department of Insurance
LBB Staff: b > td > JMc, NPe, BFa, GDZ
JMc, NPe, BFa, GDZ