WeeklyFinancingNewsPulseStateandLocalEditionfinal20100120.pdf (PDF | 317.00 kb)
SAMHSA222s Weekly Financing News Pulse: State and Local Edition January 20, 2010 1/20/10 1 SAMHSA222s Weekly Financing News Pulse: State and Local Edition Arizona Arkansas California Connecticut Florida Georgia Idaho Illinois Maine Massachusetts Michigan Minnesota Missouri Montana Nevada New Jersey New Mexico New York Oklahoma Pennsylvania Rhode Island Tennessee Washington West Virginia To Subscribe to SAMHSA222s Weekly Financing News Pulse, please go to the following link and choose 223Health Care Financing224: https://service.govdelivery.com/service/multi_subscr ibe.html?code=USSAMHSA&origin=http://www.samhsa.go v/enetwork/success.aspx For questions or comments, please contact Kevin Hennessy ( kevin.hennessy@samhsa.hhs.gov ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition January 20, 2010 1/20/10 2 Around the States: State and Local Behavioral Health Financing New Arizona Governor Releases FY2011 Budget Proposal, Plans to Eliminate KidCare, Cut Mental Health Treatment : On January 15, Governor Jan Brewer (R) released her FY2011 budget , designed to close a $4.6 billion deficit over 18 months. The governor is seeking a voter repeal of mandated Medicaid coverage that would remove 310,500 from the Arizona Health Care Cost Containment System (AHCCCS). In addition, Governor Brewer222s budget proposes eliminating the state222s Children222s Health Insurance Program (CHIP), KidsCare, which provides health coverage to 47,000 children and reducing services for 17,000 seriously mentally ill adults ( Phoenix Business Journal, 1/16 ; Gov Monitor, 1/18 ). Arkansas Legislature to Study Draft Bill Blocking National Health Care Reform Provisions : On January 15, the Arkansas Legislature approved an interim study on a draft bill to 223ensure freedom and choice in health care224 by blocking any individual or employer health care mandate. The bill is backed State Reps.Frank Glidewell (R) and Dan Greenberg (R) ( Times Record Online, 1/16 ). DHS Says Medicaid Budget Could be in Deficit by 2012 : Speaking to the Joint Budget Committee , Arkansas Department of Human Services (DHS) Director John Selig said that the state222s Medicaid budget could run a deficit by 2012 if spending continues to grow at its current rate. At the same hearing, the committee approved Governor Mike Beebe222s (D) recommended $7.5 billion DHS budget ( Arkansas News, 1/14 ). California Assembly Committee Approves Marijuana Legalization Bill : On January 12, the California Assembly Public Safety Committee voted 4 3 in favor of bill ( AB 390), introduced by Assemblyman Tom Ammiano (D), that would legalize, tax, and regulate marijuana sales to individuals 21 years and older. The bill, which is estimated to generate $1.3 billion in taxes and cultivation fees, now heads to the Health Committee ( Join Together, 1/12 ; Los Angeles Times, 1/12 ). Connecticut State Recovered $6.7 Million from Health Insurers : In 2009, the Connecticut Office of the Healthcare Advocate recovered $6.7 million in claims and services that were initially denied by Connecticut insurance companies. According to a spokesperson from the office, consumers would otherwise have paid the cost of those services ( Hartford Courant, 1/14 ; Kaiser Health News, 1/14 ). SAMHSA Funds Two Programs to Combat Alcohol Abuse : The Connecticut Department of Mental Health and Addiction Services distributed grants of $320,000 to the Groton Adolescent Substance Abuse Prevention Coalition (GASP) and the Ledyard Safe Teens Coalition to fund programs that combat underage drinking. The Ledge Light Health District, which received a Drug Free Communities grant from Substance Abuse and Mental Health Services Administration (SAMHSA) and the Office of National Drug Control Policy (ONDCP), runs both schools ( TheDay.com, 1/13 ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition January 20, 2010 1/20/10 3 Florida DOH Highlights Enforcement and Funding Flaws in Florida222s Prescription Tracking Law : At a Florida House Health Care Regulation Policy Committee hearing on January 12, state officials highlighted flaws in Florida222s new law regulating pain clinics. Under the law, the Florida Department of Health (DOH) does not have the authority to impose sanctions on pain clinics that fail to meet the state222s criteria. In addition, though clinics must pay $1,500 for annual inspections, the Florida Legislature did not provide taxpayer funding for the program, instead placing the responsibility for funding procurement on the Governor Charlie Christ222s (R) Office of Drug Control (ODC). Thus far, the ODC has raised $550,000 for the program, largely through federal grants, but is seeking $1 million this year to cover startup expenses and $500,000 in subsequent years ( AP, 1/13 ; Kaiser Health News, 1/14 ). Attorney General and State Senator Plan to Contest Federal Health Care Reform : Florida Attorney General Bill McCollum (R), the Republican gubernatorial candidate in Florida, signaled that he will challenge the legality of an individual mandate under national health care reform. In addition, Florida Senate Health Regulation Committee Chairman Don Gaetz (R) said that he and other GOP state legislators will seek ways to block national health care legislation to preserve state choice and local business control ( Health News Florida, 1/12 ; Kaiser Health News, 1/13 ). Georgia Governor Proposes Budget Cutting Most Departments, Taxing Hospitals, and Increasing Behavioral Health Funding: On January 15, Governor Sonny Perdue (R) unveiled his $18.2 billion FY2011 budget proposal and a $1.2 billion cut to the current year budget. The current year cuts include a 4 percent reduction in health services funding but an additional $20 million for the Georgia Department of Behavioral Health and Developmental Disabilities (DBHDD). Governor Perdue222s FY2011 budget would cut health funding less than 1 percent while providing an additional $50 million for DBHDD. The governor222s FY2011 budget would also institute a 1.6 percent tax on hospitals222 adjusted gross patient revenue, designed to generate $247.8 million and draw down additional federal Medicaid funds. Additional revenue will come from imposing fees on nursing homes and health insurers to raise $131.3 million and $97 million respectively. Governor Perdue says that the additional fees are necessary as the Medicaid program faces a projected $635 million shortfall for FY2011 and notes that, without the increased revenue, the state would be forced to cut provider reimbursements by 16 percent ( Chattanooga Times Free Press, 1/16 ; Macon, 1/16 ; August Chronicle, 1/15 ; Atlanta Business Chronicle, 1/15 ). Idaho Medicaid Enrollment Up 13 Percent, DHW Requests FY2011 Budget Increase : A spokesperson for the Idaho Department of Health and Welfare (DHW) reports that the state222s Medicaid enrollment is up 13 percent over the past three years. DHW has submitted a $2.1 billion budget request for FY2011, up slightly from $2.05 billion in 2010; however, the proposed FY2011 budget would reduce personnel and operating expenses by $26 million ( AP via ABC, 1/9 ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition January 20, 2010 1/20/10 4 Illinois Lake County Receives State Substance Abuse Treatment Grant : The Lake County Health Department has received a $147,513 grant from the Illinois Department of Human Services222 (DHS) Division of Alcohol and Substance Abuse . The new funding, which partially offsets an $878,500 cut in state funding during 2008, will focus on access to care and prevention, allowing the county to hire new staff for programs targeting women and youth ( Lake County NewsSun, 1/19 ; Chicago Tribune, 1/16 ). Maine State Commission Releases Substance Abuse Report Card, Issues Recommendations : The Maine Substance Abuse Services Commission released a 2010 Report Card on Maine Substance Abuse Services , analyzing the state222s substance abuse services and issuing recommendations. The report, which the commission based on a Join Together and Boston University School of Public Health report, 223 Blueprint for the States: Policies to Improve the Ways States Organize and Deliver Alcohol and Drug Prevention and Treatment ,224 gives the state 223Cs224 in three of four assessment categories. Maine222s substance abuse services received 223Cs224 in Leadership/Structure and Sustainability, Resources, and Legislative Initiatives, and a 223B224 in Measurement and Accountability. The report also recommends increasing the state222s alcohol tax to fund treatment and prevention programs; carefully considering the unintended implications of state legislation on substance use; ensuring that all state departments are engaged in a state wide substance abuse strategy; and increasing access to treatment through insurance coverage ( Maine OSA ; Join Together, 1/15 ; Maine Public Broadcasting Network, 1/15 ). Massachusetts Republican Scott Brown Wins Massachusetts Senate Special Election: On January 19, State Senator Scott Brown (R) defeated Massachusetts Attorney General Martha Coakley (D) in a special election to fill the late Senator Edward 223Ted224 Kennedy222s (D MA) U.S. Senate seat. When Brown is officially sworn in, he will strip the Democrats of their 60 vote supermajority that has allowed them to block GOP filibusters, particularly on health care reform legislation. Senator Paul G. Kirk Jr. (D MA), a former chairman of the Democratic National Committee and close political and personal ally of Senator Kennedy, will continue to serve as Interim U.S. Senator for Massachusetts until Brown is sworn in ( CQ Politics, 1/19 ; CQ Politics, 1/19 ; New York Times, 1/20 ). Michigan Senate Republicans Propose Budget with Major Medicaid Cuts, Mental Health Affected : On January 19, Senate Republicans offered a budget proposal that would cut $2 billion from next year222s budget. The proposal would cut Medicaid funding by $500 million, eliminating optional services including dental, chiropractic, mental health, and pharmacyservices and ending eligibility for 18 to 21year olds. In addition, the proposal would reduce state employee pay by 5 percent and require state employees to pay 20 percent of their health care premiums. Before becoming law, the pay reduction would require a constitutional amendment ( Detroit News, 1/19 ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition January 20, 2010 1/20/10 5 Minnesota Ramsey County to Open Integrated Health Care Facility : A new $11 million services center providing detoxification, mental health crisis services, and commitment court services in Ramsey County is scheduled to open in the Fall of 2011. Three different St. Paul facilities currently provide the services and county officials hope that consolidating into the planned East Metro Behavioral Health Crisis Center will lower costs, increase resources, enhance access, and improve outcomes. The new center will have 60 beds available for detoxification and will provide chemical dependency assessments, psychiatry, medication management, and mental health crisis response. Once completed, other counties will be able to rent space in the new facility ( Star Tribute, 1/16 ). Missouri Missouri Uses Federal Medicaid Fraud Detection Funding Most Efficiently : Using data released by the U.S. Department of Health and Human Services (HHS) but not presented as state rankings, Missouri officials determined that the state recovered $29.8 million in fraudulent Medicaid spending in 2008 while receiving $1.6 million in federal Medicaid fraud detection grants. The ratio makes Missouri the most efficient Medicaid fraud detector, recovering $18.81 for every federal dollar spent ( Kansas City Star, 1/12 ; Kansas City Business Journal, 1/12 ; Kaiser Health News, 1/13 ). Montana Update: State Reduces Reimbursements for Mental Health Case Management : Effective January 1, the Montana Department of Public Health and Human Services (DPHHS) is cutting funding for mental health treatment under the state222s Mental Health Service Plan (MHSP). The MHSP pays for mental health coverage for residents earning up to 150 percent of the federal poverty level (FPL) who are not eligible for Medicaid.DPHHS222 cuts reduce the number of reimbursable case management hours from eight to 1.5 per client. In addition, DPHHS222 Helena office will now approve all clients for case management rather than delegating those decisions to local treatment providers ( Bozeman Daily Chronicle, 1/12 ). State Finds Most Employers Complying with MHPAEA : Representatives from the Office of the Montana Commissioner of Securities and Insurance report that most insurance carriers who have filed their 2010 paperwork are offering plans that are in compliance with the new federal Wellstone Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), which took effect January 1. Though MHPAEA does not require employers to offer mental health and substance abuse coverage, it requires all employer sponsored group health plans with 51 or more employees that offer such coverage to do so on an equal basis with general health care. A spokesperson for the state also noted that there has been no sign of employers opting out of behavioral health coverage to avoid the parity requirement, likely because Montana insurance law requires that all health insurers provide some coverage for major mental illness, yielding an interactive effect between the state and federal laws ( Billings Gazette, 1/17 ). Nevada Governor Considers Withdrawing Nevada from Medicaid : With national health care reform looming, Governor Jim Gibbons (R) is considering withdrawing Nevada from Medicaid and has asked Nevada SAMHSA222s Weekly Financing News Pulse: State and Local Edition January 20, 2010 1/20/10 6 Health and Human Services (HHS) Director Mike Willden and the Nevada Human Resources Department to examine the idea. The move comes after the Heritage Foundation published a report examining the financial benefits for states withdrawing from Medicaid under health care reform. Nevada officials estimate that health reform222s Medicaid expansions will cost the state $636 million by 2019. If the state withdrew from the program, most former Medicaid enrollees would be eligible for federal subsidies to purchase private coverage; however, the federal subsidies would not cover the full premium costs for all 233,000 current Medicaid enrollees. The state would provide additional funding, without the assistance of the Medicaid Federal Medical Assistance Percentage (FMAP) ( Kaiser Health News, 1/15 ; Las Vegas Sun, 1/15 ; Record Courier, 1/16 ; AP via San Jose Mercury News, 1/15 ). New Jersey Audit Finds Medicaid Billing Errors Cost State $13 Million : A Medicaid audit performed by the New Jersey Office of Legislative Services found $13 million in overpayments for hospital and pharmacy services. The issues arise from an outdated automated system that relies primarily on manual input, making it difficult to track Medicaid beneficiaries. The Division of Medical Assistance and Health Services awarded two contracts to clarify the Medicaid beneficiary list and simplify the client enrollment and tracking process. ( New Jersey Real Time News, 1/15 ). New Mexico Update: State Seeking New Behavioral Health Contractor: After the New Mexico Behavioral Health Collaborative reached an agreement with OptumHealth New Mexico under which Optum agreed to pay $1.5 million to settle behavioral health reimbursement issues, Governor Bill Richardson (D) has directed the collaborative to put the state222s contract out to bid. OptumHealth took over the state222s four year $1 billion contract in July, replacing ValueOptions New Mexico. OptumHealth222s contract has been plagued by billing delays and technical problems; however, a spokesperson for the governor said that, while Oputm222s performance was a factor, the decision to issue a new RFP was based on the budget, the Medicaid redesign, and health care reform ( New Mexico Independent, 1/18 ). New York Governor Proposes Budget Cutting Health Care Funding : On January 19, Governor David Paterson (D) proposed a $134 billion budget designed to address the state222s $7.4 billion deficit. The governor222s budget would cut $1 billion from health care spending, cutting Medicaid reimbursements, reducing hospital spending by $114.5 million, and increasing an inpatient services tax to generate an additional $130.2 million. The budget would also create a new excise tax on soft drinks and increase the state222s cigarette tax ( New York Times, 1/19 ; New York Daily News, 1/19 ; Post Standard, 1/19 ). Governor Seeks Coalition to Shift Dual Eligibles222 Costs to the Federal Government : Governor David Paterson (D) and Lt. Governor Richard Ravitch are spearheading an effort to build a coalition of large states to shift the burden of health care costs for dually eligible Medicaid and Medicare beneficiaries to the federal government. Governor Paterson has reached out to California and several other states that are still considering the proposal. With increased federal funding, New York would save $8 billion over the 2010 2011 budget because approximately 17 percent of New Yorkers qualify for both Medicaid and SAMHSA222s Weekly Financing News Pulse: State and Local Edition January 20, 2010 1/20/10 7 Medicare. Governor Paterson says the change would cost the federal government roughly $70 billion ( AP, 1/12 ; KHN, 1/13 ). Oklahoma ODMHSAS to Cut $4.5 Million to Address Shortfall : After numerous rounds of cuts, the Oklahoma Department of Mental Health and Substance Abuse Services (ODMHSAS) is aiming to cut $4.5 million from its operating budget because of current year revenue shortfalls. The agency plans to obtain significant savings through layoffs and has already sent notices to 54 employees ( AP via KFSM, 1/13 ). Oklahoma Health Care Authority Reduces Medicaid Reimbursements : On January 14, the Oklahoma Health Care Authority approved a 3.25 percent reduction in Medicaid reimbursement rates effective April 1. The rate reduction will save the state $5 million and result in the loss of $15 million in federal matching funds. The rate reductions come in addition to $17 million in cuts implemented in December 2009 and bring the total state and federal Medicaid funding reduction to $69.6 million ( Tulsa World, 1/15 ; AP via KFSM, 1/14 ; Kaiser Health News, 1/15 ). Pennsylvania Departments Detail Effects of Governor222s Cuts, Health Care Affected : On January 13, state officials released details regarding the effects of Governor Ed Rendell222s (D) December budget cuts. The governor222s cuts required departments to reduce their budgets by 1 percent to save $161 million but allowed department heads to determine where to reduce funding. Among other reductions, the Department of Public Welfare (DPW) cut $3 million slated to fund health clinics and $4.7 million for acute care hospitals ( Philadelphia Business Journal, 1/14 ). New Wing Added to Behavioral Health Center : A $4.4 million expansion of the Roxbury Treatment Center near Shippensburg was completed on January 14. With the addition of 26 beds to the acute psychiatric unit, there are now fifty two beds in the psychiatric unit and 60 beds in the chemical dependency program. Other additions include a gym, space for group therapy, and a multi purpose room. The center also plans to fill 2530 more behavioral health positions ( Behavioral Health Central, 1/15 ). Rhode Island House Panel Considers Effects of Medicaid Waiver : The Rhode Island House Finance Committee held hearings on Governor Don Carcieri222s (R) first ever Global Medicaid Waiver, under which Governor Carcieri gained unprecedented control over the state222s Medicaid program in exchange for limiting Medicaid spending to $12 billion through 2013. Hearing attendees noted that the promised $67 million in savings were not realized, partially because of the recession and the conditions associated with American Recovery and Reinvestment Act (ARRA) FMAP increases. State legislators, who were not prepared to take steps towards opting out of the waiver, noted that the program required reexamination ( Providence Journal, 1/14 ; Kaiser Health News, 1/14 ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition January 20, 2010 1/20/10 8 Tennessee State Officials Seek Medicaid Cuts to Close Budget Gap : To reduce the state222s budget deficit, state leadership has asked TennCare officials to cut the state222s $2 billion Medicaid budget by 7 percent. The cuts would impose a $10,000 annual cap on inpatient hospital care and limit outpatient hospital, primary care, and lab/X ray services to eight visits per service. Before taking effect, the Centers for Medicare & Medicaid Services (CMS), Governor Phil Bredesen (D) and Tennessee Legislature must approve the cuts ( The Commercial Appeal, 1/17 ) Washington Update: Walgreens Threatens to Withdraw 64 Pharmacies from Medicaid : Echoing a similar threat made last year when Washington officials sought to cut Medicaid brand name prescription drug reimbursements, Walgreen Co. plans to withdraw 64 of its 121 pharmacies from Washington222s Medicaid program unless the state raises its brand name reimbursement rate. According to Walgreens, the 64 pharmacies, which represent 75 percent of the company222s Medicaid business in the state, will withdraw from Medicaid February 15 unless a deal is reached ( Wall Street Journal, 1/14 ; Spokesman Review, 1/14 ; Kaiser Health News, 1/14 ). Governor Proposes Budget Plan Restoring Health Care Funding: On January 12, Governor Christine Gregoire (D) released a budget proposal, following the budget she released in December, to fulfill her legal requirement to issue a state budget based exclusively on existing revenue. Though the governor222s updated plan would still cut about $1 billion in spending, it would restore $161 million for Washington222s Basic Health Program, which provides health care for the poor. The state cut funding for Basic Health by 43 percent in June, electing to increase out of pocket costs rather than reduce eligibility ( Seattle Post Intelligencer, 1/12 ). West Virginia DHHR Estimates State222s Costs Under National Health Care Reform Bills; Lawmakers Dispute Figures: The West Virginia Department of Health and Human Resources (DHHR) estimates that Medicaid expansion under the Senate222s health care reform bill ( HR 3590 ) would cost West Virginia $147 million through 2019, while the House version ( HR 3962 ) would cost $725 million over the same period ( Intelligencer/Wheeling News Register, 1/15 ). However, state legislators say that DHHR222s assumptions are incorrect and may have doubled the actual cost. State legislators and DHHR officials are working to resolve the issue, which centers on the projected number of newly eligible Medicaid beneficiaries ( Charleston Gazette, 1/18 ).
