WeeklyFinancingNewsPulsefinal20090427.pdf (PDF | 452.70 kb)
SAMHSA222s Weekly Financing News Pulse April 27, 2009 4/27/09 1 National Health Financing News Senate Schedules Sebelius Nomination White House and Legislators Pursuing Budget Reconciliation and Health Reform Legislators Seek Health Reform Bill by the Summer, Begin Hearings on Overhaul Strategies Obama Names Chief Technology and Performance Officers Blumenthal Expects Huge Challenges Ar ound EHRs for HHS National Health IT Office Mayo Clinic Offers Free Personal Health Records Website More U.S Workers Utilizing Employer - Sponsored Health Benefits Report Fin ds State Medical Boards Disciplining Fewer Physicians AMA to Offer Physicians Web- Based Information Service Survey Shows Health Plan Satisfaction is Lower in Small Companies Employers Underestimate Impact of Employee Health on Productivity AHRQ Report Says Mental Disorders are the Most Costly Childhood Disease NCSL Report Illustrates Effects of Recession on State Budgets; GAO Report Finds States are Slow to Utilize ARRA Funds Major Health Insurers Report Lower Earnings, Fewer Enrollees Congressman Calls for Investigation of Insurers Denial of Health Claims for Civilians Working in Iraq and Afghanistan Haley Group Proposes Medicare and Medicaid Reform Survey Polls American Attitudes Toward the U.S. Health Care System NIDA Begins Drug Use Screening Initiative Pharmaceutical Companies and Insurers Link Drug Efficacy and Price UAW Seeks to Protect Employee Benefits in the Event of Chrysler Bankruptcy Around the Hill: Hearings on Health Financing Around the States: State and Local Behavioral Health Financing News Alabama Arizona California Colorado Connecticut Florida Iowa Kansas Louisiana Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nevada New Hampshire New Jersey New York North Carolina Ohio Pennsylvania Rhode Island Texas Washington West Virginia For questions or comments, please contact Sarah Wattenberg (sarah.wattenberg@samhsa.hhs.gov). SAMHSA222s Weekly Financing News Pulse April 27, 2009 4/27/09 2 National Health Financing News Senate Schedules Sebelius Nomination: Senate Majority Leader Harry Reid (D - NV) reached a deal with Senate Republicans to begin eight hours of debate on Kansas Governor Kathleen Sebelius222 (D) nomination for Secretary of the Department of Health and Human Services (HHS) starting at 10 a.m. on April 28. Senate Minority Leader Mitch McConnell (R - KY) temporarily blocked the vote on April 23 saying that lawmakers needed more time to consider the nomination. The Senate Finance Committee approved the governor222s nomination on April 21 , but she must receive 60 votes in the April 28 hearing to be confir med ( Kaiser Daily Health Policy Report, 4/24 ; Kaiser Daily Health Policy Report, 4/22 ). W hite House and Legislators Pursuing Budget Reconciliation and Health Reform : On April 24, House and Senate negotiators struck a tentative deal on the major elements of the budget for fiscal year 2010. The tentative agreement includes using the bud get reconciliation process to fast - track health care reform with a simple majority in the Senate. Democrats are seeking an approved budget for FY 2010 by April 29, President Barack Obama222s 100th day in office. (CQ Today, 4/24, Kaiser Daily Health Policy Report, 4/24 ; Kaiser Daily Health Policy Report, 4/23 ; Kaiser Daily Health Policy Report, 4/22 ). Legislators Seek Health Reform Bill by the Summer, Begin Hearings on Overhaul Strategies : Senate Finance Committee Chair Max Baucus (D - MT) and Senate Health, Education, Labor and Pensions Committee Chair Edward Kennedy (D - MA) told President Obama in a letter on April 20 that they will each mark up separate health care overhaul legislation by June. The Senators said that, though they will write the legislat ion separately, they will work closely to ensure that the bills are similar. House leaders also told President Obama that they will have a single House health care overhaul bill ready for a vote by August ( Kaiser Daily Health Policy Report, 4/21 ; New York Times, 4/20 ). On April 21 , the Senate Finance Committee hel d the first of three roundtable meetings to discuss health care reform. The Tuesday session focused on using Medicare to test waste reduction strategies , including improving follow - up care and preventing hospital readmissions ( Kaiser Daily Health Policy Report, 4/22 ). Similarly, the House Education and Labor Health, Employment, Labor and Pension Subcommittee discussed strategies to reduce health care costs in a hearing h eld on April 23. The panel considered numerous health care delivery strategies including: a single payer system, an employee benefit cooperative, a national health insurance exchange, a Medicaid expansion, and smaller changes to the current employer - based health insurance model ( Kaiser Daily Health Policy Report, 4/24 ). Obama Names Chief Technology and Performance Officers : On April 18, President Barack Obama named Aneesh Copra as Chief Technology Officer (CTO) and Jeffery Zients as Chief Performance Officer (CPO) and Deputy Director of the Office of Management and Budget (OMB). Copra has served as the Virginia Technology Secretary since 2006 and Zients has been CEO and chair of the Advisory Board Company and served as the chair of the Corporate Executive Board (CEB) ( Kaiser Daily Health Policy Report, 4/20 ). Blumenthal Expects Huge Challenges Around EHRs for HHS National Health IT Office : Dr. David Blumenthal , head of the Office of National Coordinator for Health Information Technology for the Department of Health and Human Services (HHS) ( Financing News Pulse 3/27 edition) , anticip ates several barriers to implementing an interoperable system of electronic health records (EHRs) in the United States. He believes that high initial set up costs, potential tech - support problems, and data privacy concerns will be chief among the barriers . The American Recovery and Reinvestment Act (ARRA) includes $17 billion in incentive payments for physicians and hospitals that adopt certified EHR SAMHSA222s Weekly Financing News Pulse April 27, 2009 4/27/09 3 systems. The EHR certification process currently falls to the Certification Commission for Healthcare IT ; however, Blumenthal will be responsible for setting certificat ion guidelines under the ARRA ( Kaiser Daily Health Policy Report, 4/21 ). Ma yo Clinic Offers Free Persona l Health Records Website : On April 21 , the Mayo Clinic launched a free website, Mayo Clinic Health Monitor , allowing users to create and maintain personal health records with Microsoft222s HealthVault system. The system, which is open to all users, includes an appointment reminder function, a section in which to store physician222s contact information, and, after a serious of questions, suggestions for screenings, tests, and articles for further reading ( Kaiser Daily Health Policy Report, 4/21 ). The Mayo Clinic Health Monitor is available here . More U.S Workers Utilizing Employer -Sponsored Health Benefits : A survey by the International Foundation of Employee Benefit Plans (IFEBP), released April 17, found that one - third of employers surveyed reported that their employees were filling more prescriptions and undergoing more costly medical procedures due to concerns that t heir health benefits may expire. Employers also reported that 24 percent of employees had added dependents to their plan while 17.8 percent of employers have conducted , or considered conducting, dependent eligibility audits. The survey also found that 35 percent of employers are raising employee costs through premiums, deductibles, co - insurance , or co - payments ( Kaiser Daily Health Policy Report, 4/20 ; Wall Street Journal, 4/18 ). The survey results are available on the IFEB222s website . Report Finds State Medical Boards Disciplining Fewer Physicians: A report released on April 20 by the Public Citizen , analyzing data from the Federation of State Medical Boards , found that the number of serious disciplinary actions taken by state medical boards against physicians has fallen by 21.5 percent between 2004 and 2008. In 2004 , boards took an average of 3.72 disciplinary actions per 1,000 physicians but only 2.92 per 1,000 in 2008. The report also ranks states based on the frequency with which they take serious disciplinary actions. The Public Citizen defines serious disciplinary action as any action equal to or more sever than license restriction ( Kaiser Daily Health Policy Report, 4/21 ). Public Citizen222s full report is available on their website . AMA to Offer Physicians Web -Based Information Service : The American Medical Association (AMA) announced plans to off er an online service allowing physicians access to an electronic prescribing system and certain reference materials. The new website, developed in conjunction with Compuware , aims to help doctors adopt health IT while increasing AMA membership. The AMA ha s not released pricing details for the service but will pilot the website before offering it to all AMA members in 2010 (Kaiser Daily Health Policy Report, 4/22 ). Surv ey Shows Health Plan Satisfaction is Lower in Small Companies : A health plan satisfaction survey, conducted for the third year by J.D. Power and Associates , found that employees of small businesses are less satisfied with their company222s health benefits th an employees of larger companies. Small business 222 employees averaged a 692 on the 1000 - point health plan satisfaction scale while employees from companies with 500 - 5,000 workers averaged 717 , and employees of companies with more than 5, 000 employees avera ge d 725 ( New Jersey Business & Real Estate News, 4/20 ). Employers Underestimate Impact of Employee Health on Productivity : A multi - year study published in the Journal of Occupational and Environmental Medicine (JOEM) found that poor hea l th SAMHSA222s Weekly Financing News Pulse April 27, 2009 4/27/09 4 among workers is more costly to U.S. employers than they believe. The study found that sick employees who are present at work but unable to perform at their full capacity create a greater drain on the company 222s productivity than absent employees. The study also found that, al though based on cost alone, cancer, back/neck pain, coronary heart disease, chronic pain, and high cholesterol are the conditions most costly to employers, when factoring in health - relate d productivity losses , the top five become depression, obesity, arthritis, back/neck pain, and anxiety. The American College of Occupational and Environmental Medicine (ACOEM), the Integrated Benefits Institute (IBI), and Alere LLC (formerly Matria Healthcare, Inc .) conducted the study. ( Newswise, 4/17 ). An abstract of the study is available on the JOEM222s website . AHRQ Report Says Mental Disorders are the Most Costly Childhood Disease: A report by Agency for Healthcare Research and Quality (AHRQ) examined information from the Medical Expenditure Panel Survey and conclude d that treating depression and mental disorders in U.S. children cost $8.9 bi llion in 2006. At $8.9 billion, treating mental disorders and depression is more costly than treatment of any other condition in children ( Reuters, 4/22 ). The report is available on AHRQ222s website . NCSL Report Illustrates Effects of Recessio n on State Budgets ; GAO Report Finds States are Slow to Utilize ARRA Funds: A National Conference of State Legislators (NCSL) survey, released April 21, found that 43 states are projecting budget deficits for next year, two - thirds of states expect budget d eficits in 2011, and 19 states and Puerto Rico report facing deficits representing 10 percent or more of their entire budget ( AP, 4/23 ). However, a re port released the same day by the Government Accountability Office (GAO) found that states have been relatively slow to utilize the $49 b illion in ARRA funding for the 2009 fiscal year. The GAO found that states are effectively utilizing Medicaid funds bu t that only three states have applied for stabilization funds (CA, IL, SD), few states have spent significant amount s of transportation funding, and states have yet to reach an agreements with the U.S Department of Transportation about highway funding. Th e GAO222s report also found that states lack the resources needed to implement strict oversight and accountability measures to ensure proper management of the ARRA funds ( Wall Street Journal, 4/23 ; Kaiser Daily Health Policy Report, 4/24 ). More information from NCSL222s report is available on NCSL222s website and the GAO222s full report is available on the agency222s website . Major Health Insurers Report Lower Earnings, Fewer Enrollees: WellPoint and UnitedHealth Group have bot h reported lowered earnings and declining enrollment in the current recession. WellPoint , the largest health insurer in the U.S., reported a 1.3 percent decrease in first quarter net income while UnitedHealth222s first quarter earnings fell $10 million this year, from $994 million in the first quarter of 2008 to $984 million in the first quarter of 2009. In addition, WellPoint lost 500, 000 members since December 2008 and the company reports that 325,000 of those members left due to layoffs or employer coverage opt outs . UnitedHealth also saw their membership decline by 900,000 enrollees since the end of 2008 ( Kaiser Daily Health Policy Report, 4/23 ; AP, 4/21 ) . Congressman Calls for Investigation of Insurers Denial of Health Claims for Civilians Working in Iraq and Afghanistan : In a letter delivered April 21 to House O versight and Government Reform Committee, Domestic Policy Subcommittee Chair Dennis Kucinich (D - OH), Rep. Elijah Cummings (D - MD) called for an investigation into American International Group (AIG) and other insurers222 routine denial of health insurances claims made by civilians working in Iraq and Afghanistan. Rep. Cummings letter comes in response to a report by the Los Angeles Times and ProPublica covered SAMHSA222s Weekly Financing News Pulse April 27, 2009 4/27/09 5 in last week222s Financing News Pulse (4/20 edition) which found that insurers routinely deny such clai ms. AIG has issued a statement saying it paid the 223vast majority224 of claims without dispute ( Kaiser Daily Health Policy Report, 4/22 ). Haley Group Proposes Medicare a nd Medicaid Reform: The Haley Group, a company specializing in electronic financial transaction networks, has proposed a Medicare and Medicaid reform plan that the group estimates would generate $797 billion over 20 years. The plan would change the provid er payment cycle from 14 to 30 days, charging interest during the additional 16 days of cash flow, and offer providers the option to receive early direct deposit payments in two banking days for a 2 percent fee deducted at the time of deposit. Senator Ric hard Lugar (R- IN) said that the group222s proposal to change the payment schedule has merit ( Business Wire via IT Business Net, 4/21 ). S urvey Polls American Attitudes Toward t he U.S. Health Care System : The Public and the Health Care Delivery System , a phone survey conducted by National Public Radio (NPR), the Kaiser Family Foundation (KFF), and the Harvard School of Public Health examined Americans222 experiences with the U.S. health care system, their opinions about the current system, and their outlook on proposed health care reform. The survey found that 7 out of 10 Americans believe there is not always scientific evidence about which course of treatment is most effective for which patient. The survey also found that, though most (75 percent) Americans believe that physicians should use EHRs and that adopting EHRs will increase the quality of care, few expect the technology to yield significant health care savings ( Kaiser Family Foundation, 4/22 ; Kaiser Daily Health Policy Report, 4/22 ; Kaiser Daily Health Policy Report, 4/23 ). The survey also found that 64 percent of uninsured adults would be willing to pay more than $100 a month for health insurance , though the average cost of an individual plan is r oughly $400 a month ( Kaiser Daily Health Policy Report, 4/24 ). The full survey results are available on the KFF w ebsite . KFF has also released the results of the April 2009 Kaiser Health T racking P oll , which are also available on the KFF website . NIDA Begins Drug Use Screening Initiative: The Nati onal Institute of Drug Abuse (NIDA) began its first Physician222s Outreach Initiative, NIDAMED , designed to give medical professionals tools and resources to detect, prevent, and treat substance abuse in their patients. NIDAMED targets primary care physicians, stressing the importance of the doctor- patient relationship in detecting potentially dangerous behavior before it reaches crisis levels. The program provides doctors with an online screening tool and companion quick reference guide ( Media Newswire , 4/23 ). Pharmaceutical Companies and Insurers Link Drug Efficacy and Price : Some pharmaceutical companies have begun linking the prices of some of their medication to the efficacy of the drugs . The idea behind the agreement is to unify the goals of the insurers, pharmaceutical companies, employers, and employees. Some experts believe the model may be a positive shift away from the fee- for- service treatment model towards a pay - for- performance model. Merck and CIGNA have one such deal with Diabetes medications, Januvia and Janumet. Under the deal , CIGNA receives discounts on the drugs some of which require that CIGNA ensure patients take the drugs correctly. In exchange , CIGNA will charge low er copays for those drugs to encourage their use ( Kaiser Daily Health Policy Report, 4/23 ). UAW Seeks to Protect Employee Benefits in the Event of Chrysler Bankruptcy : Last week222s Financing News Pulse (4/20 edition) reported that Chrysler Group and the United Auto Workers (UAW) were close to a deal allowing the company to pay half of its share of the VEBA, the voluntary employees222 SAMHSA222s Weekly Financing News Pulse April 27, 2009 4/27/09 6 beneficiary association , retiree health care obligations in company stock rather than cash. The UAW and the U.S. Treasury Department have now worked out an agreement , in principle , to protect the health care benefits and pension plans should Chrysler file for bankruptcy. Chrysler must presid ent the Obama administration with a financial plan by April 30 in order to avoid bankruptcy and receive the remainder of their federal bailout loan ( Kaiser Daily Health Policy Report, 4/24 ). Around the Hill: Hearings on H ealth Financing House Veterans222 Affairs Committee : Florida Health Infrastructure for Veterans 12:00 p.m. April 20, Florida Community College Jacksonville, FL 9:30 a.m. April 21, Board of County Commission Chambers, Orlando, FL Senate Finance Committee: HHS Secretary Nomination TBA April 21, 215 Dirksen Senate Finance Committee: Health Care Overhaul 10:00 a.m. April 21, 216 Hart TBA, May 5, TBA TBA, May 14, TBA House Oversight and Government Reform Committee: Economic Stimulus Oversight 10:00 a.m. April 21, Brooklyn Borough Hall Brooklyn, NY House Ways and Means Committee: Health Insurance Market Overhaul 10:00 a.m. April 22, 1100 Longworth Senate Veterans222 Affairs Committee : Health- Related Legisla tion 2:30 p.m. April 22, 418 Russell Senate Homeland Security and Governmental Affairs Subcommittee on Federal Financial Management, Government Information, Federal Services, and International Security : Waste and Fraud in Medicare and Medicaid 3:00 p.m. April 22, 342 Dirksen Senate Homeland Security and Governmental Affairs Committee : State and Local Oversight of Stimulus Funding 9:00 a.m. April 23, 342 Dirksen Senate Appropriations Subcommittee on Commerce, Justice and Science and Related Agencies : Fi scal 2010 Appropriations: Commerce, Justice, Science 10:00 a.m. April 23, 192 Dirksen House Veterans222 Affairs Subcommittee on Disability Assistance and Memorial Affairs : Post Traumatic Stress Disorder Leg i slation 10:00 a.m. April 23, 334 Cannon House Ed ucation and Labor Subcommittee on Health, Employment, Labor, and Pensions : Reducing the Cost of SAMHSA222s Weekly Financing News Pulse April 27, 2009 4/27/09 7 Health Insurance 10:30 a.m. April 23, 2175 Rayburn Senate Indian Affairs Committee : Indian Health Service Nomination 2:15 p.m. April 23, 628 Dirksen Senate Hea lth, Education, Labor and Pensions Committee: State Experiences with Health Care Revision 2:30 p.m. April 28, 430 Dirksen Senate Finance Committee: Treasury and HHS Nominations 10:00 a.m. April 30, 215 Dirksen Senate Health, Education, Labor and Pensions Committee: Revising Access to Health Care 10:00 a.m. April 30, 430 Dirksen House Veterans222 Affairs Committee : Mental Health Needs of Veterans 10:00 a.m. April, 30 334 Cannon Around the States: State and Local Behavioral Health Financing News Alabama Leg islators Approve Resolution to Create Mental Health Task Force : On April 16 , Tuscaloosa legislators passed a resolution to create the Task Force to Study the Future of Mental Health Facilities and Client Care in Tuscaloosa County . The 20 - member task force will deliver a report evaluating the current mental health system and recommending improvements during the 2010 legislative session ( Tuscaloosa News, 4/17 ). Arizona L egislature Approves Bills Allow ing State to Receive Federal Funds : The Arizona House and Senate passed two bills to place the state in compliance with federal provisions governing dist ribution of the $1.7 billion Arizona expects to receive from the ARRA. One bill uses $97 million in federal funds to extend unemployment benefits by 13 weeks, adding an additional seven weeks of benefits if the state unemployment rate reaches 8 percent. The other bill requires Medicaid enrollees to reapply for the program every 12 months, replacing Arizona222s current 6 - month reenrollment requirement. The bills now go to Governor Jan Brewer (R) for approval ( Arizona Republic, 4/23 ; AP via KSWT, 4/23 ; Kaiser Daily Health Policy Report, 4/24 ). Cochise County Facing Rising Health Care Expenditures: County Administrator Mike Ortega told the Cochise County Board of Supervisors on April 21 that the county faces an additional $1 million in employee health care costs for the 2009 - 2010 fiscal year. The county currently pays 100 percent of health premiums for roughly 1000 employees and their enrolled dependents. The county222s h ealth care costs have risen 15.5 percent for families and 14 percent for individuals; however, the board stated that they will not reduce benefits this year ( Sierra Vista Herald, 4/22 ). SAMHSA222s Weekly Financing News Pulse April 27, 2009 4/27/09 8 California Los Angeles County Offici als Propose Budget, Health Departments Affected : Los Angeles County officials released a budget on April 21, spending $415 million less than the previous fiscal year. The proposal cuts most department budgets by 5 percent but makes larger staff cuts for s ocial services and health departments. However, the proposed budget includes additional staff for the Department of Children Services and the Department of Mental Health. The budget also cuts $155.3 million for health facilities, including a mental healt h urgent care center ( Los Angeles Times, 4/20 ). San Francisco Budget Cuts Threaten Substance Abuse and Mental Health Courts Capacity : San Francisco Mayor Gavin N ewsom (D) has asked all of the city222s departments to cut their budget by 25 percent. The Public Defender222s Office would lose 38 attorneys under the reductions and Jeff Adachi , head o f the Public Defender222s Office, says that if the cuts are realized, his office would not have the staff to participate in specialized M/SU courts. However, Lisa Lightman, Director of the Office of Collaborative Justice Programs , which houses both the Drug Court and Behavioral Health Court , says the budget reductions would not eliminate either program , but would likely reduce the number of eligible participants ( San Francisco Examiner, 4/18 ). Legislators Consider Bill to Prohibit Gender- Based Premium Setting : The Ca lifornia legislature is considering a bill ( AB 119 ) prohibiting insurers from considering a health insurance applicant222s sex when setting health plan premiums. San Francisco filled a lawsuit seeking to ban the practice, known as 223gender rating,224 but it is on hold pending the outcome of AB 119. A related bill in the California legislature ( AB 98 ) would require health plans to cover maternity services ( Kaiser Daily Health Policy Report, 4/21 ). Stanislaus County to Cut Mental Health Funding : At a public hearing on May 19, the Stanislaus County Board of Supervisors will announce that they are cutting mental health servic es to eliminate a $6.9 million budget gap for Behavioral Health and Recovery Services . The county will shut down services in many outlying communities, eliminate 73 positions, and cut $5.5 million from psychiatric programs. Over the past several years, t he county has closed three outpatient mental health clinics and eliminated 60 M/SU staff positions ( Modesto Bee, 4/21 ). Santa Clara County Officials Consider Mental Health Cuts : Facing a $270 million budget deficit , the Santa Clara County Board of Supervisors is considering cutting $22 million from the county222s mental health funding. The supervisors will make a final decision on the cuts in June ( KCBS, 4/22 ). Berkley Considers Plan to Fund Mental Health Programs : On April 15, Berkeley, California began a 30 - day comment period on a plan to use $659,500 in new state funding for the city222s Mental Health Division . The plan, known as the Workforce Education and Training Plan, would use the funds to train graduate students, interns, and staff while also hiring additional staff for the division, which currently has nearly 80 employees. The plan is part of California222s Mental Health Services A ct ( Proposition 63 ) ( Daily Californian, 4/20 ). SAMHSA222s Weekly Financing News Pulse April 27, 2009 4/27/09 9 CMS May Pull Medicare Funding for California Medical Center : In a letter dated April 15 , CMS warned Southwest Healthcare System that a California Department of Public Health inspection of the Rancho Springs Medical Center on March 5 found the center was in violation of Medicare rules surrounding infection control and hospital governance. If the hospital does not correct the problems , CMS will terminate the facilities222 Medicare contract on July 15. This is the third time CMS has threatened to strip the hospital of Medicare funding since 2007 ( Press - Enterprise, 4/23 ). Update: Rep. Farr to Introduce Legislation in the U.S. House to Alter Medicare Reimbursement Rates, Affecting CA Counties: Rep. Sam Farr (D - CA) will introduce legislation in the House to cha nge the way Medicare calculates physician reimbursements, resulting in higher Medicare rates for at least seven California counties. CMS currently calculates Medicare rates based on geography, resulting in over 40 California counties receiving 223rural224 rat es, which are 16 percent lower than rates in surrounding geographic areas. Rep. Farr222s legislation, estimated to cost $50 million, would use calculations similar to those Medicare uses for hospital reimburs ement rates. Under the new system, some counties in Northern and Central California would see decreased Medicare rates. The proposed legislation comes after Farr222s aids met with House Speaker Nancy Pelosi222s (D - CA) staff and after a lawsuit was filed in the Ninth U.S. Circuit Court of Appeals on April 1 3 ( Financing News Pulse 4/20 edition) . ( California Healthline, 4/17 ). Colorado Lawmakers Approve Budget, Cut Health C are : On April 22 the Colorado legislature approved an $18.8 billion budget for the coming fiscal year. Governor Bill Ritter (D) may now approve the budget or elect to veto parts of it , sending them back to the legislature for alterations or an override vote. The budget reduces physician Medicaid reimbursements and cuts $15 million in tobacco tax funding from health clinics for the uninsured ( AP via Forbes, 4/23 ; Kaiser Daily Health Policy Report, 4/24 ). Governor Approves Bill to Use Hospital Fees to Fund Medicaid: On April 21 , Governor Bill Ritter (D) signed the Colorado Healthcare Affordability A ct ( HB 1293 ) into law, imposing a provider fee on the state222s hospitals to generate $600 million annually. Combined with the federal matching funds, the measure will yield $1.2 billion for the state222s Medicaid program some of which will be used to raise h ospital222s Medicaid reimbursement rates . If approved by CMS, the bill would also expand the Medicaid eligibility income cap for children and pregnant women from 205 percent of the federal poverty level (FPL) to 250 percent and allow single childless adults with incomes up to the FPL to enroll in the program as well. ( Denver Daily News, 4/22 ; Denver Busin ess Journal, 4/21 ; Kaiser Daily Health Policy Report, 4/24 ) . House Considers Health Care Mandate : In response to a bill ( HB 1273 ) covered in last week222s Financing News Pulse (4/20 edition) proposing the creation of a single - payer health care system in Colorado, Rep. Joe Rice (D) has sponsored another health care reform bill ( HB 1358 ) which creates a health care authority to develop a three - tiered individual public and p rivate health care system. The system would offer a government - run plan, government - sponsored policies for residents with expensive health care SAMHSA222s Weekly Financing News Pulse April 27, 2009 4/27/09 10 needs, and private plans. The bill is currently under consideration by the House Business Affairs and Labor Co mmittee ( Denver Business Journal, 4/22 ). Connecticut Office of Fiscal Analysis Releases Report on State Health Reform : The Office of Fiscal Analysis (OFA) released its cost evaluation of a 41 - page package, SustiNet , establishing broad health care reform including universal coverage, increased reimbursement for providers treating low - income patients, and subsidies for those patients. Based on the Massachusetts health care model, the OFA estimates that SustiNet would have a $25 million startup cost. Startup costs had not previously been estimated but the Universal Healthcare Foundation of Connecticut has estimated the total cost of SustiNet at roughly $950 million. Concerns about the state222s budget deficit, possible changes to be made to health care at the national level, and the sweeping nature of the reform , which would likely switch the state from private insurance plans to a self- insured program, have delayed the possible effective date of any SustiNet legislation to July 1, 2011. The delay means that the two - year budget currently under consideration in the Connecticut legislation would be unaffected by Sutsinet , which would not begin until the following biennium ( Connecticut Post, 4/18 ). State Seeking ARRA Grants to Combat Prescription Drug Abuse : Governor Jodi Rell (D) announced that Connecticut is seeking $620,000 in U.S. Department of Justice (DOJ) ARRA - funded gran ts to hire special staff for the Department of Consumer Protection to isolate 223doctor shoppers , 224 individuals that use multiple physicians and pharmacies to obtain and abuse prescription medication. The initiative would steer doctor shoppers to treatment a nd rehabilitation rather than arrest and incarceration ( Stamford Plus, 4/22 ). Florida House and Senate Differ on Mental Health Funding : The budget passed by the Florida House , which is over $500 million less than the $65.6 billion Senate budget, would cut $15 million for substance abuse and mental health pr ograms state - wide. The larger S enate budget makes no cuts to mental health programs and cuts substance abuse treatment funding by only 5 percent. The House Speaker and Senate President have delayed budget negotiations, originally scheduled for April 20, to allow the branches to resolve major differences ( AP via Miami Herald, 4/20 ; Orlando Sentinel, 4/20 ; Orlando Business Journal, 4/17 ). House Approves Bill to Alter Medicaid Advisory Panel : On April 22, the Florida House approved a measure to restructure t he Low - Income Pool Council that recommends how to distribute $2 billion in Medicaid funding. The bill would add seven members to the 17 - member council, four to be appointed by the House speaker and Senate President, and one each from the Department of Health , a federally qualified health center, and the Agency for Health C are Administration, which oversees that state222s Medicaid program . The Agency for Health Care Administration appointee would be a non - voting member ( Miami Herald, 4/23 ). SAMHSA222s Weekly Financing News Pulse April 27, 2009 4/27/09 11 Medicare Fraud Prevalent in South Florida : A fraud report released April 21 by the HHS Office of the Inspector Genera l found that, though South Florida accounts for only 2 percent of Medicare222s b eneficiaries, the area accounts for 17 percent of Medicare222s total spending on inhalation drugs. The report also found that Medicare spent $143 million on respiratory drugs for Miami - Dad e County beneficiaries in 2007. That figure was 20 times what Medicar e paid for respiratory drugs in the Chicago - area, which has twice as many beneficiaries. The inspector general found numerous types of Medicare fraud and noted that two - thirds of Medicare beneficiaries in South Florida submitting claims for inhalation dru gs have not seen their prescribing physician in three years. The Miami Herald reports that patients routinely receive 223kickbacks224 for filing false claims ( Kaiser Daily Health Policy Report, 4/23 ; Miami Herald, 4/22 ). The report is available on inspector general222s website . Study Says Medicaid Cuts May Lead to Job Losses : A study released April 16 by the Florida Hospital Association and conducted by the University of Florida , found that a $100 million cut to the state222s Medicaid program would eliminate 2,187 health care jo bs and reduce output by $258 million and value by $157 million. The Florida Senate is currently considering a $90 million Medicaid funding cut along with a reduction in Medicaid funding for hospitals by $250 million over two years . The hospital association has supported raising Florida222s cigarette tax by $1 per pack to fund the state222s Medicaid program ( Kaiser Daily Health Policy Report, 4/20 ). Group Opposes Proposed C ounty Health Employee Salary Cap: The Florida Association of Counties is opposing a provision in Florida222s proposed state budget that would cap the salaries of future employees at county health departments. The group argues that counties will not be able to draw qualified physicians and dentists if they are not able to pay competitive salaries, adding that in many Florida communities, county health professionals treat the bulk of Medicaid enrollees. The state currently pays roughly 30 percent of county health department funding ( Kaiser Daily Health Policy Report, 4/23 ). Iowa House Passes Narrowed Health Reform Bill : On April 20 , the Iowa House approved a narrowed versio n of the health insurance bill ( SF 389 ) the Senate passed in March ( Financing News Pulse 3/27 edition ) . The House version does not include the health insurance exchange, designed to help uninsured residents find health coverage or a provision allowing small businesses to buy into the state employee plan. In addition, the house bill does not include restrictions on gifts health care providers may receive from pharmaceutical salespeople , or increased funding for the State Children222s Health Insurance Program (SCHIP) . Instead, t he House version would create a panel tasked with presenting the 2010 legislature with recommendations to cover the uninsured. The house version also maintains a provision requiring parents to enroll eligible children in public health programs, but eliminates the penalty for parents that fail to do so . Rep. Mark Smith (D) says he expects the legislature will still allocate $7 million to raise the income eligibility for SCHIP to 300 percent of the FPL ( Des Moines Register, 4/21 ; Kaiser Daily Health Policy Report, 4/22 ). SAMHSA222s Weekly Financing News Pulse April 27, 2009 4/27/09 12 Kansas Governor Signs Law Putting Ka nsas in Compliance with ARRA COBRA Requirements : Governor Kathleen Sebelius (D), who is also President Obama222s HHS Secretary nominee, signed a law ( HB 2052 ) on April 14 amending state law to allow Kansas residents to receive the 65 percent nine - month COBRA subsidy under the ARRA ( Financing News Pulse 4/20 , 2/20 editions ) ( Kaiser Daily Health Policy Report, 4/21 ; KHI N ews Service, 4/14 ). House Budget Committee Proposes Budget Cuts : On April 21, the Kansas House Budget Committee asked Kansas social service agencies to reduce their budgets by 5 percent. The Kansas Health Policy Authority , the agency that oversees the state222s Medicaid program, says the move will affect core health services, for c e the state to reduce reimbursement rates for physicians , and potentially exacerbate delays in Medicaid application processing which could jeopardize ARRA funding ( KCUR, 4/22 ). Louisiana Insurers Back Bill Establish ing Commission to Examine Health Insurance Mandates : On April 21 , the Louisiana Association of Health Plans urged the state legislature to pass a bill ( HB 438 ) establishing the Louisiana Mandated Health Benefits Commission. If established, the commission will examine proposals for new insurance coverage mandates and issue recommendations before the stat e legislature considers the proposals. HB 438 establishes a 15 - member committee representing all interested parties. Louisiana currently has 32 separate laws mandating health coverage for particular services ( Kaiser Daily Health Policy Report, 4/23 ). Maryland Howard County Budget Makes Limited Cuts to Health Department : Howard County Executive Ken Ulman released his county budget proposal on April 20 , which propos es a 4 percent overall reduction in spending. The budget will lay off nine county employees, including four for the Health Department . Virtually every department faces some funding cuts; however, the budget does not reduce the $4.8 million in human service gr ants for non - profits. The county222s budget is constrained by a $14.5 million cut in state funding ( Baltimore Sun, 4/20 ). Massachusetts CHA May be Forced to Cut Detox Unit Due to State Budget Cuts : The Cambridge Health Alliance (CHA), a Cambridge - based health care system, may be forced to cut its Inpatient Addiction Service as a result of the $50 million Governor Deval Patrick (D) has propose d cutting from CHA222s b udget. The governor222s plan returns $40 million of that funding to CHA only if CHA undergoes significant restructuring, inc luding cutting back service at the a ddiction unit, which currently provides a walk - in 26 - bed detoxification facility ( Somerville Journal, 4/22 ). Michigan Blue Cross t o Increase Reimbursement Rates for Physicians Heading 223Patient - Centered Medical Homes224 : On April 21 , B lue Cross Blue Shield of Michigan announced that it will begin paying higher reimbursement rates for physicians222 practices participating in the 223patient - centered medical home224 model. T he program focus es on wellness, chronic disease management, and improving access to care SAMHSA222s Weekly Financing News Pulse April 27, 2009 4/27/09 13 by providing health coaches, nurses, and dietitians a nd coordinating care through EHRs. Qualifying physicians will receive 10 percent rate increases beginning July 1 ( Kaiser Daily Health Policy Report, 4/23 ). Minnesota Update: Hospitals Project Service Cuts Under Governor222s Budget : At a meeting with lawmakers on April 22, Minnesota hospital officials outlined the service cuts they anticipate under Gove rnor Tim Pawlenty222s (R) proposed budget ( Financing News Pulse 4/20, 3/20 editions). The governor222s budget removes 93,000 Minnesotans from state - sponsored health care, placing the burden on the state222s hospitals to provide uncompensated care. Hospital off icials anticipate that, under Governor Pawlenty222s budget, inpatient mental health beds and mental health crisis services may cut. They also anticipate rural hospital closures and increased insurance premiums ( Pioneer Press, 4/22 ). Publicly Insured Residents Receive Lower Quality Care than the Privately Insured: A report by the Minnesota Department of Human Services found that Minnesota residents with public insurance recei ved a lower standard of care than those with private insurance , even when treated by the same health care providers. However, t he study also found that for all categories of care except d iabetes care, a sthma, and chlamydia screening, the gap between publicly and privately funded patients has narrowed in the past year ( Kaiser Daily Health Policy Report, 4/20 ). Mississippi Governor Signs Tax Exemption for Medicaid and Medicare Supplies : Governor Haley Barbour (R) signed a law ( HB 193) providing sales tax exemptions for home medical supplies and eyeglasses purchased by Medicaid and Medicare enrollees. Under the previous law, only the government - paid portion of the cost was sales - tax exempt, the new bill expands tax exemptions to the self - paid portion of the purchase ( Columbus Commercial Dispatch via Clarion Ledger, 4/19 ). Missouri Se nate Hears Financial Analysis of Proposal to Drug Test Welfare Recipients : The Missouri House approved a measure requiring recipients of Temporary Assistance for Needy Families (TANF) whom the state believes may be using drugs to take drug tests and, in the event of failure, forfeit their benefits and undergo substance abuse treatment through the Department of Mental Health. However, during a Senate committee hearing on the bill, substance abuse experts testified that the state currently has a 3,000- person waiting list for substance abuse treatment and that cost of such programs ranges from $1,070 to $2,511 per - person . If 8 percent of TANF recipients tested positive227the percentage of positive tests in a similar Michigan program 227 the cost of the treatment wo uld reach $2.7 million annually ( Columbia Daily Tribune, 4/23 ). Montana Update: Three Mental Health Bills go to the Governor : The Montana House is sending th ree mental health bills ( HB 130 , HB 131 , and HB 132 ) to Governor Brian Schweitzer222s (D) office for consideration. The three bills ( Financing New Pulse 4/13) authorize $4 million in spending for locally run me ntal health diversion programs and allow for th e option of locally based mental health treatment in lieu of SAMHSA222s Weekly Financing News Pulse April 27, 2009 4/27/09 14 placement in the state hospital. The governor222s office has spoken out against the bills ( Bozeman Daily Chronicle, 4/22 ). Nevada Nevada Assembly Passes Legislation to Eliminate Medical Malpractice Cap: On April 20 , the Nevada Assembly approved a bill to lift the previous $350,000 cap on jury awards for non- economic damages in medical malpractice lawsuits. The bill permits unlimited damages for cases of gross negligence and gives patients an additional year to decide if they wish to file a lawsuit ( Kaiser Daily Health Policy Report, 4/22 ). New Hampshire Medical Society Challenges State222s Claim to Surplus Funds : The New Hampshire Medical Society is challenging New Hampshire222s claim to a $110 million surplus in the state fund that underwrites the state222s Medical Malpracti ce Joint Underwriting Association , created in 1975 to provide malpractice insurance not otherwise available. Governor John Lynch 222s (D) budget uses $50 million of the fund for this year 222s budget and the balance for the budget beginning July 1. The state contends that the surplus in the fund belongs to the government because the medical professionals have received the service for which they paid; however, the medical society contends that the 900 policyholders have exclusive rights to the funds. The House has already passed a budget that includes the funds and no parties have filed lawsuits ( AP via WBZTV CBS, 4/19 ). New Jersey Ho spital Propose Seeking Additional Federal Medicaid Funds: New Jersey hospitals have suggested using hospital funds to apply for additional federal Medicaid matching funds to avoid Governor Jon Corzine222s (D) proposed changes to charity care ( Financing News Pulse 4/13 edition ). Under the hospitals plan , the state would seek permission from CMS to receive federal Medicaid matching funds for half of the $40 million that hospitals pay to support health clinics. Clinic operators oppose the plan for fear the clinics would temporarily lose some of their state funding ( Star Ledger, 4/22 ). Democratic Lawmakers Seek to Eliminate Governor222s HIV/AIDS Drug Copayments: Democra tic lawmakers are seeking ways to eliminate Governor Jon Corzine222s (D) proposed plan to charge sliding scale copayments for HIV/AIDS medication to generate $1.36 million to help close the state222s budget deficit ( Financing News Pulse 3/27 edition ). Some l a wmakers have suggested cutting funding from transportation programs for HIV/AIDS patients instead . The legislature must pass a budget bill by June 30 ( Star Ledger , 4/21 ). New York Health Insurance Premiums Increase for New York City Residents : A New York Post analysis of data from the New York State Insurance Department found that the average monthly premium for family health coverage in New York City has increa sed by 13 percent in the last calendar year. Average family health care premiums in April 2008 were $3,866 compared with $4,354 in April 2009. The analysis found that six of the eight insurers offering health insurance in the city have raised their rates in the past year. GHI HMO Select increased rates by 35 percent, Aetna Health by 27 percent, Health Insurance SAMHSA222s Weekly Financing News Pulse April 27, 2009 4/27/09 15 Plan of Greater New York by 15 percent, Atlantis Health Plan by 10 percent, and Oxford Health Plans by 8 percent. Managed Health did not change its rates and Empire Healthchoice HMO reduced rates by 6 percent. Experts expect premiums to increase again when companies must to pay $853 million in insurance taxes included in the new state budget ( Kaiser Daily Health Policy Report, 4/21 ). Health Care Review Panel Never Convened : New York222s 2007 - 2008 state budget created a health care review panel, the Health Care Quality and Cost Containment Commission, set to consi st of 13 - members and analyze health care mandates222 effects on health insurance cost and quality. Six members have been named to the panel in addition to the commissioners of health and insurance; however, the panel has never been convened. Governor David Paterson222s (D) administration said the Insurance Department did not provide an explanation for the inaction ( Elmira Star Gazette, 4/18 ). North Carolina Legislature Passes State Employee Health Plan Bail Out : The House and Senate have approved a bill authorizing a $675 million bailout of the state employee health insurance plan. The funds plug short - term holes but do not address long- term plan issues. In addition to the s tate funds, the bill will increase state employee cost by raising premiums for dependent coverage by 8.9 percent, raising deductibles and copays, and decreasing benefits for smokers and obese employees ( AP via WRAL, 4/22 ). Harnett County Hospital Receives State Funding for Inpatient Mental Health Facility : On April 20, Good Hope Hospital in Erwin, North Carolina received final clearance to begin renovating its former psychiatric facility to create a new 16 - bed inpatient mental health facility. Funding for the construction comes from the state, which has allocated up to $2 million to the project 227 estimated to cost $1.5 million. Once built, Horizon Health Corporation will operate the facility and Good Hope will pay for a portion of the expenses. The facility is also expected to bring 29 jobs to Erwin ( Daily Record, 4/21 ). Ohio House Democrats Released Budget Proposal, Restore Funding for Hospitals and Nursing Homes : On April 21 , Ohio House Democrats released a $53.9 billion two - year budget that restore s many of Governor Ted Strickland222s (D) proposed cuts to hospitals and nursing homes . The Democrats plan, expected to go to vote in the House next week, would restore nursing homes to their current funding levels and send roughly $290 million to Ohio hospitals. The proposal also reduces the waiting period to enroll children in Medicaid from six months to three months and eliminates a waiting period for Medicaid - enrolled children222s parents who lose their jobs ( Dayton Da ily News, 4/21 ; Plain Dealer via Clevland.com, 4/22 ). Pennsylvania County Mental Health Court Receives Salary Approval : The Luzerne County Salar y Board approved three mental health court positions to be salaried from the $584,000 in grants the county has received to begin the program. The court will allow non - violent mentally ill offenders to receive mental health treatment in lieu of incarceration ( Luzerne County Reporter, 4/23 ). SAMHSA222s Weekly Financing News Pulse April 27, 2009 4/27/09 16 Rhode Island Cuts to Affect Nursing Homes : Governor Don Carcieri (R) and the state legislature approved a measure thi s month enacting a $5 million cut to Medicaid payments for nursing homes ( Financing News Pulse 4/13 edition). Jim Nyberg, Director of the Rhode Island Association of Facilities and Services for the Aged , says that the cuts will necessitate layoffs. N urse s and caretakers have protested the cuts ( Boston Globe, 4/19 ; Kaiser Daily Health Policy Report, 4/24 ). Texas House Approves Budget Cutting Medicaid, Returns to Senate for Compromise : On April 18 , the Texas House unanimously approved a two - year $178.4 billion budget, nearly $4 billion less than the budget approved by the Senate. The House budget utilizes $2 billion less in road construction bonds and spends $2 billion less on Medicaid. The budget now goes to the Senate where budget compromise negotiations are expected to take weeks ( Dallas Morning News, 4/19 ; Houston Chronicle, 4/18 ) . Senate Approves Medicaid Bill : On April 17 , the Texas Senate approved a bill ( SB 7 ) authorizing a Medicaid pilot program to pay nursing homes on performance and results rather than the number of services provided. The bill would also collect information from hospitals to study payment changes, create a pilot program to reduce obesity among Medicaid and SCHIP enrollees, require the state to implement electronic health records for Medicaid and SCHIP, and reduce or eliminate Medicaid payments for gross er rors in care. The measure now moves to the House for approval ( Austin American - Statesman, 4/18 ; AP via CBS, 4/17 ). Washington Lawmakers Settle on Budget : House and Senate Democratic budget writers settled on a $31.4 billion two - year state budget on April 23. Lawmakers cut roughly $4 billion from health care, social services, and education but avoided even larger cuts by utilizing over $3 billion in ARRA funding, delaying pension payments , and raising college tuition. The budget cuts roughly $250 million from the Basic Health Program 227 the state222s program to provide low - cost he alth insurance to low - income residents through private health plans 227 by lowering the income eligibility criteria, and no longer allow ing residents to enroll if they are eligible for other health coverage or if they receive health benefits from the Washingto n Department of Social and Health Services . The budget also cuts $60 million from General Assistance , which provides money and health care to disabled residents ( A P via Seattle Times, 4/23 ; Spokesman - Review, 4/23 ). Sales Tax Referendum Passes House Committee, Moves to House Floor : A bill ( HB 2377) to offer a ballot measure in November to fund health care programs through a sales tax , passed a House committee on April 21 and now moves to the House floor for approval. The measure would raise the state sales tax by three-tenths of 1 percent for three years to raise $1.1 billion for health care programs. Individuals below a certain income level would be eligible for rebates to offset the additional tax ( AP via Seattle Times, 4/21 ). Whatcom County Mental Health Tax Funding May Shift Focus : In July 2008 the Whatcom County Council voted to approve a one - tenth of 1 percent sales tax devoted to mental health treatment. The SAMHSA222s Weekly Financing News Pulse April 27, 2009 4/27/09 17 council required that the money, then estimated at $ 3.5 million annually but now projected at $2.5 million, be allocated to new or expanded mental health programs. However, a bill currently in the Washington Senate ( SB 5301 ) would reverse that decision, allowing local officials to use 50 percent of the tax revenue to supplant existing programs. The bill would gradually phase out the new funding rules over five years, until 2015. At the same time, another state budget proposal would reduce Whatcom County222s flexible Health Department funding from $900,000 t o $450,000 ( Bellingham Herald, 4/19 ). West Virginia State Plans to Add Mental Health Beds, Some Advocates Object : While Governor Joe Manchin (R) has yet to take action on the bills p assed by West Virginia legislature , which would increase funding for community - based mental health treatment (Financing News Pulse 4/20, 4/13 edition s), the state is simultaneously seeking to add over 100 mental health hospital beds in three locations acro ss the state . Some mental health advocates have criticize d the expense as an inefficient allocation of mental health resources and an unwillingness to seek holistic, community - based, solutions ( AP via West Virginia Gazette, 4/22 ).
