Bill

HB 3006

84(R) - 2015
House Insurance
House Insurance
Insurance

Vote Recommendation

No
  • Neutral
  • Neutral
  • Neutral
  • Negative
  • Neutral

Author(s)

Garnet F. Coleman

Co-Author(s)

Greg Bonnen
Sarah Davis
John Zerwas

Bill Caption

Relating to certain penalties paid to the Texas Health Insurance Risk Pool.

Fiscal Notes

Estimated Two-year Net Impact to General Revenue Related Funds for HB3006, Committee Report 1st House, Substituted: a negative impact of ($25,600,000) through the biennium ending August 31, 2017. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.

This bill would do one or more of the following: create or recreate a dedicated account in the General Revenue Fund, create or recreate a special or trust fund either with or outside of the Treasury, or create a dedicated revenue source.  The fund, account, or revenue dedication included in this bill would be subject to funds consolidation review by the current Legislature.

No fiscal implication to units of local government is anticipated.

Bill Analysis

Under current law, penalties and interest collected through Sections 843.342 (m) and 1301.137 (l) of the Insurance Code are collected by the Texas Health Insurance Risk Pool and transferred to the credit of the General Revenue Fund.

The bill would amend Section 843.342 and 1301.137 of the Insurance Code by directing penalties paid by non-institutional providers to be paid back to the physician, provider, or preferred provider by the health maintenance organization (HMO) or the insurer, except for any interest computed in the statutes.  The interest revenue would be required to be paid to the Texas Department of Insurance (TDI) to be distributed to the Healthy Texas Premium Stabilization Fund (Healthy Texas Fund) and be used for any purpose authorized by rule by the Commissioner of Insurance to improve access to health benefit coverage.

The bill would amend Section 843.342 and 1301.137 of the Insurance Code by directing 50 percent of penalties collected from institutional providers, including interest, to be distributed to the Healthy Texas Fund and would only be authorized to be appropriated to the Health and Human Services Commission (HHSC) to be used as follows:

  1. the first $5 million may be used only to fund HHSC's consumer assistance for Medicaid program;
  2. the next $20 million may be used only to provide postpartum coverage through the child health plan program operated under Chapter 62, Health and Safety Code, and Medicaid;  and
  3. amounts in excess of the amounts described in (1) and (2) may be used only to increase reimbursement rates to health care providers who provide services through the Texas Women's Health Program.

Any penalties relating to clean claims submitted by institutional providers that were paid under Section 843.342 (m) or 1301.137 (l) of the Insurance Code, before the effective date of this Act, and that remain unexpended and unobligated on the effective date of this Act, would be required to be used to provide grants to hospitals in Texas to upgrade the hospitals’ emergency rooms and trauma facilities. The Commissioner of Insurance would be required to adopt rules governing the distribution of these grants and distribute all the funds by September 1, 2017.

Vote Recommendation Notes

This bill takes money from the state High Risk Pool and gives it to the Healthy Texans Fund. Our objection is not necessarily with the practical purpose of the bill, but that it subtracts revenue from the High Risk Pool to finance the Healthy Texans Fund.

It is ill-advised to make a decision before the King v. Burwell case is decided this summer. Until then, we oppose legislation such as HB 3006.