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SAMHSA222s Weekly Financing News Pulse April 6, 2009 4/6/09 1 National Health Financing News Governor Sebelius Confirmed by Senate Finance Committee, Full Vote in Late April House and Senate Approve Respective Budget Resolutions Congressional Progressive Caucus Issues Letter Saying Members Will Only Support Health C are Reform with a Public Plan Option, Democrats Receptive Health Reform Dialogue Coalition Releases System Overhaul Recommendations NIH May Use Comparative Effectiveness Funding from the ARRA for Cost Comparisons Community Health Centers Receive Additional ARRA Funds HHS Officials Say $50 Million in ARRA Funding Will Fight Health Care - Associated Infections HHS Report Says Health Reform Necessary This Year House Approves Veterans222 Health Bills Wal- Mart Plans to Expand Prescription Drug Discount Program Federal Lawsuit Questions Medicaid222s Obligations for 221Medically Necessary222 Care Small Business222 Employee Benefits Costs Increased in 2007 CMS Announces New Medicare Advantage (MA) Rules to Protect Beneficiaries from Out - of - Pocket Costs NEJM Study Says 20 Percent of Medicare Beneficiaries Require Hospital Readmission Within 30 Days of Discharge AHIP Asks for Physician Support in Opposition to CMS222 Estimated MA Payment Rates Google and CMS Launch EHR Pilot Thomson Reuters Study Says Step Therapy May Increase Health Care Costs UnitedHealth Group Officials Testify About Ingenix at Senate Hearing Walgreen222s to Offer Free Clinic Visits to Unemployed, Uninsured JAMA Article Recommends Medical Groups Refuse Most Industry Funding Hospitals Intensify DVT Prevention Efforts After CMS Announced Payment Changes Large Employers Target Chronic Disease Management to Control Health care Costs Magellan Health Services Launches Autism Connections Program Around the Hill: Hearings on Health Financing Around the States: State and Local Behavioral Health Financing News Arizona California Connecticut Flor ida Georgia Hawaii Illinois Iowa Kansas Louisiana Maryland Massachusetts Michigan Mississippi Missouri Nevada New York North Carolina South Carolina Virginia Washington West Vi rginia For questions or comments, please contact Sarah Wattenberg (sarah.wattenberg@samhsa.hhs.gov). SAMHSA222s Weekly Financing News Pulse April 6, 2009 4/6/09 2 National Health Financing News Governor Sebelius Confirmed by Senate Finance Committee, Full Vote in Late April : Kansas Governor Kathleen Sebelius (D) , President Barack Obama222s nominee for Secretary of the Department of Health and Human Services (HHS) was easily confirmed by the Senate Finance Committee on April 2. The full Senate is not likely to hold confirmation hearings on her appointment until lat e April because several Republicans objected to the immediate vote. During the hearing, Governor Sebelius indicated that she supported a public health insurance option, though she did not discuss a health insurance mandate ( Kaiser Daily Health Policy Report, 4/3 ). In previous public remarks, Governor Sebelius stated that, if confirmed, she planned to prioritize the passage and implementation of comprehensive health care reform ( AP via Forbes, 3/31 ). House and Senate Approve Respective Budget Resolutions : On April 2, the House and Senate approved versions of the fiscal year budget resolution ( H Co n . Res . 85, S Con. Res . 13) which both include deficit - neutral reserve funds for health care reform. Neither resolution received any Republic an votes. The resolutions now head to conference committee where legislators will seek to create a compromise res olution after the upcoming two - week recess ( Kaiser Daily Health Policy Report, 4/3 ). The House voted down the Republican would have gradually eliminated traditional Medicare fee - for- service ( Kaiser Daily Health Policy Report, 4/2 ). Congressional Progressive Caucus Issues Letter Saying Members Will Only Support Health C are Reform with a Public Plan Option, Democrats Receptive : In a letter Sent April 2 by the co - chairs of the Congressional Progressive Caucus , Reps. Lynn Woosley (D - CA) and Raul Grijalva (D - AZ) , to Democratic leaders in both houses said that the caucus would not support he alth reform legislation if it did not include a public plan option. The 77 votes in the caucus are enough to block Democratic legislation in the House if Republicans universally oppose it. House Majority Leader Steny Hoyer (D - MD), announced on March 26 t hat he will coordinate health reform efforts between the House Energy and Commerce Committee, the House Ways and Means Committee, and the House Education and Labor Committee. Hoyer and Senate Finance Committee Chair Max Baucus (D - MT) say House Democrats ar e committed to passing health reform with a public plan option ( Kaiser Daily Health Policy Report, 4/3 ; Kaiser Daily Health Policy Report, 3/27 ). Health Reform Dialogue Coalition Releases System Overhaul Recommendations : The Health Reform Dialogue , a coalition of health care firms, patients, and medical providers, released a five - page report on March 27, outlining recommendations for U.S. health care reform. The report highlights the need to complete health care re fo r m this year , and recommended maintaining the country222s employer - sponsored health care model while making health coverag e available to all Americans. The report also called for expanded Medicaid eligibility; however, it did not address numerous health reform details including the notion of a government- run health plan. The Service Employees International Union (SEIU) and the American Federation of State County and Municipal Employees refused to sign the report because did not explicitly call for a public insurance option ( Kaiser Daily Health Policy Report, 3/30 ). The full report is available here . NIH May Use Comparative Effectiveness Funding from the ARRA for Cost Comparisons: A t a hearing of the House Appropriations Labor- HHS - Education Subcommittee , Raynard Kington, a cting director of the National Institutes of Health (NIH), said that NIH may use some of the $10.4 billion in funding it receives from the Am erican Recovery and Reinvestment Act (ARRA) to fund comparative SAMHSA222s Weekly Financing News Pulse April 6, 2009 4/6/09 3 research on the cost of treatment. Kingston indicated that that NIH may elect not to fund the research with the $400 million set aside in NIH222s budget for comparative effectiveness studies . Roughly $8.2 billion of the NIH222s ARRA funding will be directed to scientific research, $1.3 billion will go to construction and equipment upgrades, $500 million is slated for NIH campus renovation , and $400 million will be devoted specifically to comparat ive effectiveness research ( Kaiser Daily Health Policy Report, 3/30 ). C ommunity Health Centers Receive Additional ARRA Funds: Department of Health and Human Services (HHS) officials announced on March 27 that community health centers would receive an additional $338 million in ARRA funding, in addition to the $155 million the centers received directly in the legislation. Representatives for HHS said the money would go to 1,128 qualified community health centers throughout the country ( Kaiser Daily Health Policy Report, 3/30 ). HHS Officials Say $50 Million in ARRA Funding Will Fight Health C are -Associated Infections: At a House Appropriations Labor - HHS - Education Subcommittee hearing on April 1 , HHS officials said they would use $50 million in ARRA funds to help prevent infections acquired in health care settings. Of the $50 million , $40 million would go to states through the Centers for Disease Control and Prevention ( CDC ) for building infection prevention collaborative and the Centers for Medicare & Medicaid Services (CMS) will use the remaining $10 million to inspect ambulatory su rgery centers ( Kaiser Daily Health Policy Report, 4/2 ). HHS Report Says Health Reform Necessary This Year: An HHS report, released on March 30, analyzes the findings o f numerous health studies and concludes that comprehensive health reform is needed this year to prevent health care costs from rising to 25 percent of the gross d omestic p roduct (GDP) by 2025 and 49 percent of the GDP by 2082. In addition to highlighting rising health care costs, the report says that America222s system of employer - sponsored health care is causing American businesses difficulty competing in the global market ( Kaiser Daily Health Policy Report, 3/31 ). The report is available HHS222 health reform website . House Approves Veterans222 Health Bills: On March 30, the House approved a bill ( H.R. 1277 ) whi ch would require the Department of Veterans Affairs to reimburse veterans for emergency care provided at non - VA facilities and for any portion of non- service - related conditions not covered by third party insurance. The CBO estimates that the measure, whic h would be retroactive, would cost the VA roughly $1 million annually. The House also approved a bill ( H.R. 1513 ) which would provide a cost - of - living adjustment for service - disabled veterans, increase the rate of disability compensation for veterans wit h service - related disabilities , and raise dependency and indemnity compensation rates for survivors of veterans with certain disabilities ( Kaiser Daily Health Policy Report , 3/31 ). Wal -Mart Plans to Expand Prescription Drug Discount Program: Wal - Mart announced that it is in negotiations with several companies to expand a pilot drug- purchasing program it currently runs with Caterpillar Inc . Under the pilot program, Wal-M art waives the $5 copay for Caterpillar employees purchasing generic drugs at Wal - Mart or Sam222s Club. As part of the program, Caterpillar bypasses a traditional pharmacy benefits manager by purchasing employee222s drugs directly from Wal- Mart ( Kaiser Daily Health Policy Report, 3/30 ; Chicago Tribune, 3/28 ). SAMHSA222s Weekly Financing News Pulse April 6, 2009 4/6/09 4 Federal Law suit Questions Medicaid222s Obligations for 221Medically Necessary222 Care: A case involving Georgia222s Medicaid program222s decision to cut home - health care hours for a child has sparked a federal court case in which o fficials from Alabama, Georgia, and Florida have argued that state Medicaid programs must retain the right to restrict treatments for children that doctors deem 223medically necessary224. The U.S. district court ruled against the state and the Georgia Department of Community Health has filled an appeal. The states argue that the determination of medical necessity cannot be left solely in the hands of the patients222 doctors ( Kaiser Daily Health Policy Report, 3/30 ). Sm all Business 222 Employee Benefits Costs Increased in 2007: The U.S. Chamber of Commerce222s Employee Benefits Study found that the cost of providing health insurance increased by 15 percent for small business between 2006 and 2007, from an average of $3,961 pe r employee to $4,559 per employee. The study also found that the cost of retirement and savings benefits increased by 14 percent and that employers of all sizes attempted to scale back employee benefits in the face of rising costs ( Occupational Health and Safety, 3/30 ). CMS Announces New Medicare Advantage (MA) Rules to Protect Beneficiaries from Out -of - Pocket Costs: On March 30, t he Centers for Med icare & Medicaid Services (CMS) announced that Medicare Advantage (MA) plans must limit beneficiaries out - of - pocket costs to $3,400 and may not charge beneficiaries more than traditional Medicare for certain services like dialysis and home - health care . In addition, CMS will not allow MA plans to charge sick, low - income beneficiaries more than they would contribute under traditional Medicare. CMS will also eliminate MA plans with 10 or fewer enrollees 227 nearly 1,400 of the 7,000 MA plans 227 to reduce confusion in the enrollment process . Finally, CMS also announced that it will no longer allow Medicare prescription drug (Part D) plans which charge higher copays for brand - name drugs to also charge beneficiaries the difference between the cost of the brand- name and the generic ( Kaiser Daily Health Policy Report, 3/31 ). NEJM Study Says 20 Percent of Medicare Beneficiaries Require Hospital Readmission Within 30 Days of Discharge: A study in the New England Journal of Medicine (NEJM) analyzed Medicare claims between October 1, 2003 and December 31, 2004 and found that 19.6 percent of beneficiaries were readmitted within 30 days of discharge, 34 percent were readmitted within 90 days of discharge, and 56.1 percent were readmitted within 12 months of their discharge. The study also found that roughly one - half of those readmitted in the first month did not see a physician prior to their second hospital visit and that the top five medical conditions requiring readmission were heart failure, pneumonia, chronic obstructive pulmonary disease, psychoses , and gastrointestinal problems . The study estimated that unplanned readmissions cost Medicare roughly $17.4 billion in 2004 ( Kaiser Daily Health Policy Report, 4/2 ; New York Times, 4/1 ). The study222s abstract as well as an accompanying editorial are available on the NEJM222s website . AHIP Asks for Physician Support in Opposition to CMS222 Estimated MA Payment Rates: In response to CMS222 inclusion of an estimate d 21 percent Medicare physician payment cut in its 2010 Medicare Advantage (MA) payment rates , covered in the Financing News Pulse (2/27 edition), America222s Health Insurance Plans (AHIP) sent letters to physicians groups asking them to join AHIP in opposin g the payment cuts ( Kaiser Daily Health Policy Report, 4/1 ). Google and CMS Launch EHR Pilot: CMS and Google have p artnered to create one of four pilot electronic health record (EHR) systems for Medicare beneficiaries. T o be eligible for the Google system, SAMHSA222s Weekly Financing News Pulse April 6, 2009 4/6/09 5 Google Health , beneficiaries must be on traditional fee - for- service Medicare plans and live in Utah or Arizona. The pilot will run through the end of 2009 and allow Medicare to provide information to beneficiaries through Google Health but not allow CMS to access information in beneficiaries222 Google Health accounts . In addition, enrollees will retain the ability to access their health records through Google Health after the pilot ends ( PC Magazine, 3/30 ). Th omson Reuters Study Says Step Therapy May Increase Health care Costs : A study by Thomson Reuters found that the insurance protocol known as 223step therapy224 , in which plan members must use a first - line medication prior to receiving coverage for a second - line medication , reduced initial drug costs and drug utilization but increased hospital admis sions and emergency room visits for hypertension. After two years, step therapy patients incurred an average cost of $99 more per quarter than non- step - therapy patients ( PR Newswire via Fox Business, 3/30 ). United Health Group Officials Testify About Ingenix at Senate Hearing : Senate Commerce, Science and Transportation Committee Chair Jay Rockefeller (D- WV) called a hearing to determine whether increased oversight is needed in light of recent findings that a database created by Ingenix , a subsidiary of UnitedHealth , used to calculate out - of - network payments has resulting in underpayments t o physicians ( Financing News Pulse 2/20 edition ). In a settlement reached in January, UnitedHealth agreed to pay $350 million in reimbursements and fu nd a new independent database. At the hearing, UnitedHealth President and CEO Stephen Hemsley said he regretted that the incident harmed the public 222s perception of insurers ( Kaiser Daily Health Policy Report, 4/1 ). Walgreen 222 s to Offer Free Clinic Visits to Unemployed, Uninsured : Thro ugh the end of 2009 , Walgreen222s will offer free treatment at Walgreens in - store Take Care clinics to unemployed and uninsured U.S. residents who lost their jobs after March 31. The program will provide treatment for a variety of conditions for which patie nts might seek urgent care , but will not provide free prescription drugs, vaccines, check-ups, or injection - based treatments. Quest Diagnostics will support the program by offering free medical screenings for strep throat and urinary tract infections. Take Care clinics are located 341 pharmacies in 35 markets nationwide ( Kaiser Daily Health Policy Report, 4/1 ). JAMA Article Recommends Medical Groups Refuse Most Indus try Funding : An article in the Journal of the American Medical Association (JAMA) recommends that medical associations refuse most funding from the health care industry because associations are crucial sources of guidelines and continuing education for doc tors and funding from health industry firms can threaten the integrity of those educational seminars. Instead, the authors suggest that medical associations allow health care firms to advertize in their medical journals and sponsor booths at their confere nces. The article is authored by former presidents of the American College of Cardiology, the American Psychiatric Association, the American College of Physicians, and the current editor- in - chief of JAMA ( Kaiser Daily Health Policy Report, 4/1 ). A forthcoming related study in the Journal of Psychotherapy and Psychosomatics found that most psychiatrists that authored the American Psychiatric Association222s newest clinical guidelines had financial ties to drug companies and health care industry firms ( Kaiser Daily Health Policy Report, 4/3 ) . The JAMA article abstract is available on JAMA222 s website . Hospitals Intensify DVT Prevention Efforts After CMS Announced Payment Changes : After CMS announced that Medicare would no longer pay for treatment of deep vein thrombosi s (DVT) or pulmonary embolisms in patients undergoing hip or knee surgery, the Wall Street Journal found t hat SAMHSA222s Weekly Financing News Pulse April 6, 2009 4/6/09 6 hospitals have increased their use of preventative measures like blood thinners and compression socks. Studies show that about 33 percent of pati ents at risk for DVT receive preventative therapies ( Kaiser Daily Health Policy Report, 4/1 ). L arge Employers Target Chronic Disease Management to Control Health care Costs : A survey by Hewitt Associates found that 80 percent of large U.S. employers are offering chronic disease management programs to curb health costs. Only 51 percent of similar employers offered such programs last year. Hewitt Associates estimate that a company with 9,500 workers and 500 retirees under age 65 spends between $18 million and $22 million on diabetes - related health care alone ( Kaiser Daily Health Policy Report, 4/3 ). Magellan Health Services Launches Autism Connections Program : Magellan Health Services announced that it will offer an 223 Autism Connections 224 program to provide a comprehensive suite of autism coverage, including case management and care co ordination, which will be available to insurers, employers, and individuals ( Business Wire, 3/26 ). Around the Hill: Hearings on Health Financing Senate Commerce, Science and Transportation Committee : Health Insurance Industry 10:00 a.m. March 31, 253 Russell Senate Health, Education, Labor and Pensions Committee : Health and Human Service Secretary 10:00 a.m. March 31, 430 Dirksen House Energy and Commerce Subcommittee on Health: Making Health Care Work for American Families 10:00 a.m. March 31, 2322 Rayburn 10:00 a.m. April 2, 2123 Rayburn House Energy and Commerce Subcommittee on Commerce, Trade and Consumer Protection: Generic Drugs 11:00 a.m. March 31, 2123 Rayburn Senate Health, Education, Labor and Pensions Committee : HHS Secretary Nomination Vote 10:00 a.m. April 1, 430 Dirksen House Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies : Reducing Health C are - Associated Infections 10:00 a.m. April 1, 2358-C Rayburn House Ways and Means Committee : Health Care Delivery System Overhaul 10:00 a.m. April 1, 1100 Longworth Senate Finance Committee : HHS Secretary Nomination 10:00 a.m. April 2, 215 Dirksen Senate Veterans222 Affairs Committee : Health- Related Legislation 2:30 p.m. April 22, 418 Russell House Veterans222 Affairs Committee : Mental Health Needs of Veterans 10:00 a.m. April, 30 334 Cannon SAMHSA222s Weekly Financing News Pulse April 6, 2009 4/6/09 7 Around the States: State and Local Behavioral Health Financing News Arizona Proposal Would Eliminate Funding for Residential Mental Health Treatment : One proposal under consideration by the Arizona legislature to cope with the state222s $3 billion budget shortfall includes eliminating state funding of residential treatment programs for people with serious mental illness ( Public News Service, 3/30 ). California Governor Signs Laws to Facilitate ARRA Aid for California, Cuts to Health Care Remain : Governor Arnold Schwarzenegger (R) signed fi ve bills last week to allow California to receive $17.5 billion in ARRA funding; however, the state will still eliminate dental care, eye exams, podiatry, chiropractics, and speech therapy from its Medicaid program and reduce Medicaid reimbursements to pub lic hospitals by 10 percent. The laws signed by Governor Schwarzenegger change eligibility reporting requirements for Medi - Cal, the state222s Medicaid program, and expands eligibility for unemployment insurance ( Kaiser Daily Health Policy Report, 3/31 ). Update: U.S. Supreme Court Denies Request to Block Healthy San Francisco Employer Mandates : The Golden Gate Restaurant Association had filed a suit alleging that requirements of San Francisco222s health plan for the uninsured, Healthy San Francisco, violated the Employee Retirement Income Security Act (ERISA) ( Financing News Pulse 3/13, 3/20 editions ) . Healthy San Francisco requires employers with at least 20 employees to pr ovide health benefits or help cover the cost of Healthy San Francisco coverage . On March 30, the U.S. Supreme Court rejected a request which would have barred the city from compelling restaurant owners to contribute to the program ( Kaiser Daily Health Policy Report, 3/31 ). Report Finds 500,000 Residents Lost Health Insurance in Recession: A report by the University of California , Berkeley222s Center for Labor Research and Education released April 1 found that from November 7, 2008 227 the official start of the current recession 227 through F ebruary 2009 , 500,000 Californians and 3.7 million Americans lost their health insurance. The report also estimates that, even if the economy fully recovers, an additional 600,000 California residents could lose health coverage by 2012 ( San Francisco Chronicle, 4/2 ; Kaiser Daily Health Policy Report, 4/3 ). The report is available on the center222s website . San Gabriel Valley Area Face s Significant Retiree Health Care Obligations : Twenty four cities in the San Gabriel Valley and Whittier, California areas responded to requests for public records on retiree health care obligations and only 12 of those cities were able to project costs. Those 12 cities had a total of $205 million in obligated health care funds for existing employees and current retirees. The other 12 cities surveyed have until 2010 to provide their liability figures to the Governmental Accounting Standards Board ( Whittier Daily News, 3/28 ). Connecticut Governor Eliminates Planned Medicaid Cuts that Affect ARRA Funding, Keeps Others : Governor Jodi Rell (D) outlined a series of Medicaid cuts ( Financing New s Pulse 2/6) as part of her proposal aimed at eliminating the state222s projected budget deficit. However, the governor will retract two proposals that would make the state ineligible for the Medicaid funding in the ARRA, which would temporarily increase Co nnecticut222s Federal Medical Assistance Percentage ( FMAP ) from 50 percent to 56.2 percent. The governor will cut her proposal to charge premiums to beneficiaries over the federal poverty level ( FPL ) and her plan to eliminate a procedure that allowed residents to declare their income levels to simplify SAMHSA222s Weekly Financing News Pulse April 6, 2009 4/6/09 8 the enrollment process. Governor Rell does not plan to retract her other proposed Medicaid cuts, including charging copays to certain Medicaid recipients ( Hartford Currant, 4/2 ). Governor Will Use Medicaid Funds to Keep Mentally Ill Out of Nursing Homes : An Associated Press (AP) analysis last week ( Financing News Pulse 3/27 edition ) found that non - elde rly mentally ill patients are increasing ly housed in U.S. nursing homes. Governor Jodi Rell (D) announced that, beginning on April 1, Medicaid funding will be available for community - based services for residents with serious mental illness. The program, called Working for Integration, Support and Empowerment (WISE), will use a Home and Community Based Services Medicaid waiver to spend money previously dedicated to nursing homes on community mental health services ( Stamford Plus, 3/31 ). Florida Fewer Children Prescribed Antipsychotics After Medicaid Change : An examination by the St. Petersburg Times recently showed that since Florida222s Medicaid program began requiring physicians to receive approval prior to prescribing antipsychotic drugs to children under age six in April 2008, the number of antipsychotic prescriptions for those children has dropped 75 percent. The data, which comes from the Florida Agency for Health Care Administration and does not include data from children enrolled in Medicaid HMOs or private insurance plans, also showed that 40 percent fewer physicians wrote prescriptions for the drugs and that request s from doctors seeking to prescribe the drugs declined by two - thirds ( Kaiser Daily Health Policy Report, 3/31 ; St. Petersburg Times, 3/29 ). Aetna Contracts with Health System to Expand MA Plan: A new three - year contract between Aetna and Lee Memorial Health System will allow Aetna222s Medicare Advantage members in the South Florida area access to Lee Memorial222s facilities including 60 hospitals and over 7,000 primary care physicians. Aetna and Lee Memorial had previously operated under an agreement that provided access only to enrollees in Aetna222s commercial plans ( Business Wire via Fox Business, 3/27 ). Georgia Senate Approves Budget w ith Health Cuts, Must Reconcile with House : The Georgia Senate approved its version of Georgia222s FY2010 budget on April 1 leaving House and Senate negotiators until April 3 to reach a compromise before the end of the scheduled session. Governor Sonny Perdue (R) and numerous senators criticized the House budget for leaving a $140 - $150 million gap in Medicaid funding ( Financing News Pulse 3/20, 3/27 editions ) . To eliminate $80 million of that shortfall, the Senate budget w ould raise the cost of health insurance for most state employees and shift many employees into different plans which will be less costly for the state. The senate budget also includes cuts to numerous other state agencies ( Atlanta Journal Cons titution, 3/31 ; AP via First Coast News, 4/1 ). Hawaii Hawaii Pacific Health and Humana Sign Agreement for Medicare Advantage Plan: A new deal between Ha waii Pacific Health and Humana will allow members of Humana222s Medicare Advantage preferred provider organization (PPO) plan (ChoicePPO) in Hawaii to receive care at Straub Clinic & Hospital and Kapiolani Medical Center at Pali Momi. Humana began offering a Medicare Advantage PPO plan in Hawaii in January 2009 ( Business Wire via Fox Business, 3/26 ). Illinois Law Limiting Hospital Charges for Uninsured Takes Effect this Week : A new Illinois law which caps the percentage of profit that hospitals can charge eligible uninsured patients took effect on April 1. The law caps the percentage of profit at 35 percent of the actual the cost of services and caps the amount of a SAMHSA222s Weekly Financing News Pulse April 6, 2009 4/6/09 9 family222s income that hospitals can collect from an uninsured family at 25 percent. The law will be enforced by the attorney general222s office ( Kaiser Daily Health Policy Report, 4/1 ). Iowa Cass County Mental Health Officials Complete Statement of Goals : Cass County mental health officials have completed a state- mandated three - year plan outlining goals and objectives for mental health services offered in the county. The plan highlights three goals: participating in the testing of a web - based date tracking system to allow Cass County provider agencies to submit bills to the county electronically, educating the public about the mental hea lth services offe red in the county, and cooperating with other counties to expand training opportunities for pr oviders and staff. The county must submit the plan to the Iowa Department of Human Services for approval by April 1 ( Atlantic News Telegraph, 3/27 ). Polk County222s Wait List for Mental Health Services Grows , Mobile Crisis Unit Faces Closure : The waiting list for comprehensive mental health services in Polk County , including group home placement, in - home care, and job assistance , has grown to 502 residents and is expected to r each 700 by the end of 2009. Though people on the waiting list can receive urgent care, they may not receive compreh ensive care for years unde r the county222s current system ( Des Moines Register, 3/30 ). In addition, a mobile crisis unit which teams Polk County police with counselors and n urses to handle mental - health - related emergency calls is facing elimination. The program222s $450,000 annual budget had been covered by the county until this year , when the state was supposed to fund the program from its emergency services budget. H owever, Iowa lawmakers have cut the emergency services budget from the state222s FY2010 budget and Polk County has already passed a budget without funding for the unit ( Des Moines Register, 4/1 ). Hospital Temporarily Closes Inpatient Ward for Mandated Training : Allen Hospital Inpatient Mental Health Unit has temporarily closed and transferred its 21 patients to other hospitals. Hospital officials said that the temporary closure is necessary to comply with instructions resulting from a March 5 investigation conducted by the Iowa Depart ment of Inspections and Appeals . The department has not yet released the findings of the investigation ( Waverly Democrat, 4/1 ). Kansas State Legislature Approves Budget, Expands Coverage for Uninsured Children: On March 31 the Kansas Legislature approved a state budget with an additional $1.2 million to extend coverage to more uninsured children through HealthWave. The budget, which is $513 million less than the current - year budget, now goes to Governor Kathleen Sebelius (D) for approval ( Kaiser Daily Health Policy Report, 4/3 ). Louisiana Governor Rejects Two Health Care Expansions from the ARRA : Governor Bobby Jindal (R) plans to reject two health care program expansions availabl e through the ARRA because the state would have to increase its expenditures to receive the federal funds. The ARRA funding would have extended coverage under the Transitional Medical Assistance program from 12 to 18 months and raise the amount of 223dispro portionate share224 money Louisiana could draw from the federal government by $58 million. The Transitional Medical Assistance program provides Medicaid funding to fam ilies going from welfare to work . A spokesman for Governor Jindal222s administration said the programs could cost the state an additional $20 million over the next two years ( Kaiser Daily Health Policy Report, 4/2 ). SAMHSA222s Weekly Financing News Pulse April 6, 2009 4/6/09 10 State Anticipates Significant Drop in Medicaid Funding After 2010 : After Louisiana222s share of the Medicaid funding in the ARRA is exhausted in 2010, the state222s Federal Medical Assistance Percentage (FMAP) is expected to drop from 67.6 percent to 63.1 percent, an estimated $238 million loss in one federal fiscal year. The FMAP is expected to decrease because the state222s personal income tax collections between 2006 and 2008 rose; however, state officials say those tax collection figures are artificially high because of recovery after hurricanes Katrina and Rita ( ABC, 3/31 ; Kaiser Daily Health Policy Report, 4/2 ). Critics Say Proposal to Penalize Doctors Caring for Low- Income Residents will have Negative Consequences : A proposal by the Louisiana Department of Health and Hospitals to impose performance standards on physicians caring for low - income residents through the state222s CommunityCARE program will encourage doctors to withdraw from the program. Under the proposal, failure to meet certain performance criteria would cause doctors to forfeit all of part of a $3 dollar per- patient fee that the doctors receive for managing patient222s care ( Kaiser Daily Health Policy Report, 4/3 ). New Orleans Officials Briefed on Local Effects of Governor222s Mental Health Plan: The New Orleans City Council heard testimony on March 27 deta iling the effects of Governor Bobby Jindal222s (R) proposed budget cuts to the Department of Health and Hospital ( Financing News Pulse 3/20 edition) on the New Orleans area. The governor222s proposal would close an uptown mental health facility and move the s lots to Southeast Louisiana Hospital in Mandeville , Louisiana . Administration officials say that , at the new location , children under 12 and adolescents between 12 and 18 can be treated in separate units according to the standard for mental health care. The department plans to wait for final passage of the budget before implementing the changes; however, spokespeople for the administration said they do not believe the plan requires legislative approval ( Times - Picayune, 3/28 ). Maryland House and Senate Pass Bill to Provide No - Cost Hospital Care to Needy Residents : On March 31, the Maryland Senate approved a bill to guarantee no - cost care at state hospitals for uninsured patients with incomes up to 150 percent of the FPL . The bill also includes provisions that regulate how, and when , hospitals can charge interest on unpaid bills ( Kaiser Daily Health Policy Report, 4/2 ; Baltimore Sun, 4/1 ) . The Maryland House of Delegates unanimously approved the bill on March 28( Kaiser Daily Health Policy Report, 3/31 ; Baltimore Sun, 3/29 ). The legislation comes in response to reports which called for expansions of Maryland222s charity care and reform of hospital billing practices and a series which ran in the Baltimore Sun ( Financing News Pulse 2/20, 2/27 editions ). Maryland Launches Website to Connect Veterans with Behavioral Health Services : Maryland became the first state to launch a website providing information on medical services, including behavioral health services, for veterans and their families. The site also offers a social networking utility ( News Channel 8, 3/31 ). The site is available here . Massachusetts Report Finds More Companies Relying on State Insurance Subsidies : A report by the Massachusetts Office of Health and Human Services found that the state222s health care expenditures for employees of large companies increased 24.6 percent in the last fiscal year to $793.7 million. The report also found that the number of employees and dependents covered by state programs increased by 12 percent , and that the employers with the largest number of employees receiving state- subsidized insurance were Wal- Mart, Stop & Shop, and the Commonwealth of Massa chusetts. The state222s mandatory health care law, passed in 2006, requires that employers with 50 or more employees have 25 percent of their SAMHSA222s Weekly Financing News Pulse April 6, 2009 4/6/09 11 workers enrolled in a company plan and that employers pay 33 percent of workers222 premiums or pay $295 per employee into the state pool for the uninsured ( Boston Globe, 4/2 ; Kaiser Daily Health Policy Report, 4/3 ). The report is available on the state222s website . Fraud, Abuse, and Neglect in Home Health C are Increase with Additional Medicaid Funding : As Massachusetts has increased funding for Medicaid home health care, reports of fraud, abuse, and neglect in the program have tripled. A state audit in 2008 found $610,000 in overpayments for personal care attendants in 2005. State officials say the increase in fraud is largely the result of covering more people rather than an increasing frequency of crime; however, the auditor222s office, the state atto rney general, and federal agencies have launched a task force to investigate major fraud ( Boston Globe, 3/28 ; Kaiser Daily Health Policy Report, 4/2 ). Hospital Mortality Rating System May Discourage Aggressive Care : The Boston Globe examined the effects of publicly reporting procedure - specific death rates for hospitals on cardiologists 222 likelihood to aggressively treat heart patients. After being cited by state officials, Massachusetts General Hospital and St. Vincent Hospital acknowledge above- average angioplasty death rates and planned to modify h ospital practices; however, some cardiologists worry that such statistical reporting will begin to outweigh patient health in angioplasty decisions , if hospitals and doctors fear that high - risk proce dures will have a negative impact on hospital ratings. Massachusetts health officials say that, though their system for determining pre - operation patient risk is among the best in the nation, they plan to work with doctors to make additional improvements to ensure that the system properly accounts for pre - surge ry risk factors and does not disincentivize performing life - saving surgery ( Kaiser Daily Health Policy Report, 4/2 ; Boston Globe, 4/1 ). Michigan House Repeals Law Limiting Drug Companies Liability : On March 26, the Michigan House passed a package of bills that would repeal a 13 - year- old law tha t provided immunity to pharmaceutical companies selling FDA- approved drugs. Under the old law, to claim legal damages, plaintiffs had to prove that drug makers deceived the Food and Drug Administration ( FDA ) in such a way as would have resulted in the FDA denying approval for the drug ( Kaiser Daily Health Policy Report, 3/30 ). Mississippi Lawmakers Fail to Reach Agreement on Hospital Tax : House and Senate lawmakers failed to reach an agreement on a hospital tax ( SB 2928 ) designed to raise money for both the state222s Medicaid program and the general fund ( Financing News Pulse 3/13 edition ). The House has proposed $45 million in hospital taxes while the Senate proposed a $90 million tax. Senate lawmakers have indicated they would be willing to accept a lower amount or a phased - in tax plan and anticipate negotiations will resume when the legislature returns in May or June to approve a budget for the coming fiscal year ( AP via Picayune Item, 4/1 ). Bill to Ease Medicaid Certification Delayed: A bill ( HB 105 ) covered previously in the Financing News Pulse (3/13 edition) to eliminate Mississippi222 s requirement that Medicaid recipients report to a local office once a year to recertify their Medicaid eligibility failed to meet a legislative deadline this week. Members of the House Medicaid Committee say they will discuss the bill again when the Hous e returns to finish the bu dget ( AP via CBS, 3/31 ). SAMHSA222s Weekly Financing News Pulse April 6, 2009 4/6/09 12 Missouri Update: Governor222s Medicaid Plan Endorsed by Business Group: Governor Jay Nixon222s (D) proposal to exp and health care through a tax on Missouri222s hospitals ( Financing News Pulse 3/13, 3/27 editions) received support from the 800 - member Associated Industries of Missouri . The group says it will place its lobbying power behind the expansion , which has faced strong opposition from Republican legislators ( KWMU, 3/31 ). Nevada Reno Mental Hospital Cited for Deficiencies : Because of suicide attempts at West Hills Hospital on December 25, 2008, s tate officials cited the Reno, Nevada facility for poor quality of care, poor staffing, lack of emergency preparedness, poor patient care, and insufficient staff training. The hospital must submit a corrective plan to state officials by April 6 ( AP via CBS, 4/2 ). New York Governor and Legislature Reach Deal on Health Care Budget : Governor David Paterson (D) originally proposed cutting $3.5 billion in state health care funding; however, due in large part to Medicaid funding from the ARRA, the governor222s budget compromise with the legislature cuts $2.3 billion from health care programs. The $48.5 billion in health care spending in the 2009 - 2010 budget is up from $45.3 billion in the previous fiscal year but a significant amount of the increase reflects a 5.8 percent increase in Medicaid beneficiaries. The budget reduces hospital funding by $306 million, nursing home spending by $225 million, and home health spending by $68 million. The budget decreases Medicaid rates for inpatient hospital care while increasing the rates paid for outpatient primary care in clinics and private doctor222s offices ( Albany Business Review, 3/31 ; Post Standard, 3/30 ; Kaiser Daily Health Policy Report, 4/3 ). Health care business es report that the budget will result in significant cuts. Kaleida Health anticipates $10 million in cuts and Catholic Health System anticipates reductions in excess of $ 8 million ( Buffalo Business First, 4/1 ). Governor and Lawmakers Reach Deal on New York222s Drug Law Reform: Governor David Paterson (D) and legislative leaders reached a deal to eli minate much of the Rockefeller drug laws and implement a system wherein judges will have more flexibility in sentencing, including the ability to sentence drug offenders to treatment rather than prison without the consent of the prosecutor. In addition, j udges will be empowered to seal convictions and dismiss charges for offenders who complete treatme nt and impose additional penalties on those who fail to complete treatment. Finally, the proposal creates new categories of crimes with harsher penalties for 223drug kingpins224 and people who sell drugs to children ( New York Times, 3/28 ). Staten Island Mental Health Program Forced to Close Due to State Budget Cuts: As a result of cut s to the New York State Office of Mental Retardation and Developmental Disabilities , the Elizabeth W. Pouch Center for Social People , one of three divisions at the Staten Island Mental Health Society , will lose $784,000 in state funding and an additional $ 73,000 in funding from the New York City Department of Health and Mental Hygiene . Spokesmen for the hospital say that the Pouch Center will be forced to effectively shut down as a result of the cuts, operating with only skeleton staff. Under the state222s plan the center, which previously treated roughly 1,000 residents annually, woul d only treat Medicaid patients. Medicaid patients previously accounted for only 10 percent of the center222s clientele ( Staten Island Advance, 4/2 ). Genesee County Receives ARRA Medicaid Funding: Genesee County will receive a total of $1.7 million in ARRA funds to help the county pay its share of New York222s Medicaid costs. On M arch 24, the county SAMHSA222s Weekly Financing News Pulse April 6, 2009 4/6/09 13 received the first installment of $740,000 and received another $253,000 on April 1 ( Daily News Online, 3/31 ). North Carolina Report Says State Should Create Basic Mental Health Financing Strategy : A report by the North Carolina Center for Public Policy Research published in North Carolina Insight said that, after the many rounds of mental health reforms in the state, state officials must clarify which residents receive public care, who should pay for the care, and whether state, local, or private entities should provide the care. Governor Beverly Perdue222s (D) proposed budget would eliminate 50 state hospital beds but provide $12 million to local hospitals for 111 additional beds. The center plans to release a second report exploring local mental health and privatization ( Raleigh News & Observer, 3/31 ). New Facility Provides Long Term Substance Abuse Treatment in Mount Airy : The House of Recovery in Mount Airy, North Carolina opened in early March to provide two years of transitional living assistance to women with substance abuse problems. The program, which accepts up to 10 res idents, covers living expenses for enrollees charging only nominal rent to those who are employed. A men222s facility, which will serve up to eight residents for one year , rather than two, is scheduled to open the second week of April ( Mount Airy News, 3/29 ). Ro anoke 222s Insurance Rate on the Rise : According to the city of Roanoke, North Carolina 222s health insurance advisory committee , health insurance costs for the city have risen over the past five years from $279 per employee in 2005- 2006 to an estimated $452.64 per employee for the upcoming fiscal year. In addition to covering active city employees , Roanoke also insures some of its retirees until they become eligible for Medicare. Roanoke has been insured by BlueCross BlueShield since the 2006 - 2007 fiscal year ( Roanoke Daily Herald, 3/31 ). Judge Rules CMS Was Wrong to Cut Hospital Funding: An administrative judged ruled that CMS was wrong to cut funding and dec ertify Broughton Hospital in Morgantown , North Carolina following a patient222s death. The judge ruled that the hospital was providin g appropriate care and services clearing the way for CMS to repay the hospital $8 million the agency has withheld since Augu st 2007 ( WRAL, 3/31 ). South Carolina Legislators to Distribute Centers222 Fliers to Raise CHIP Awareness: Two years ago, the South Carolina Legislature expanded the state222s Children222s Health Insurance Program (CHIP) to children in families making up to 200 percent of the FPL. The change extended eligibility to 70,000 children, but only 12,000 enrolled in the program. In response, the South Carolina Appleseed Legal Justice Center has printed 60 0,000 informational fliers which one quarter of the state222s legislators have agreed to deliver to their local school districts to publicize the state222s CHIP program ( Greenville News, 3/27 ). City Suffers from State Mental Health Cuts : Mental health services in the area around Anderson, South Carolina have faced significant cuts since the South Carolina Mental Health Department222s budget was reduced from $220 million to $182 million in July 2008. Statewide, the mental health department will treat 9,100 fewer patients in FY 09 than in FY08 and will provide 15,000 fewer residents with inpatient services. In the Anderson area, Patrick B. Harris Psychiatric Hospital has lowered its capacity from 154 beds to 121 and suffered $2.9 million in cuts since July 2008 (14 percent of its operating budget) . In addition, Anderson- Oconee - Pickens Mental Health Center222s budget has been reduced by 20 percent over the s ame time period ( Independent Mail, 3/28 ). SAMHSA222s Weekly Financing News Pulse April 6, 2009 4/6/09 14 Texas Senate Approves Budget : The Texas Senate approved a $182.2 billion two - year budget on Apr il 1, which includes $61.4 billion for health care . The health care - related spending includes $45.6 billion for Medicaid, $2.3 billion for the state222s CHIP, $2.4 billion for state employee health coverage, and $1.2 billion in health care for prison inmate s ( Kaiser Daily Health Policy Report, 4/3 ). Legislators Propose Bill to Lower Health Insurance Costs for Small Businesses: The Healthy Texas Act ( SB 6 ) would create a state fund, the Small Employer Premium Stabilization Fund, to offer partial reimbursement to insurers for claims by individuals with group insurance through the act . To be insured through the a ct, businesses must not have offered group insurance in the pas t year, must have a minimum of 30 percent of their employees at or below 300 percent of the FPL, and must have a minimum of 60 percent of employees willing to enroll in the insurance. The bill is estimated to cost the state $122.5 million over the biennium ( Lewisville Leader, 3/29 ). Report Shows A Few Hospital Patients Account for Significant Expense: A report by the Integrated Care Collaboration , a non - profit group o f health care providers, found that nine patients in the Austin, Texas area accounted for 2,678 emergency room visits between 2003 and 2008 for a total cost of $3 million to hospitals and governments. Eight of the nine patients had substance abuse problem s, seven had a diagnosed mental health issue, and three were homeless ( AP, 4/1 ). Houston Hospital Settles with CMS Over Medicare Overcharging : Methodist Hospital in Houston, Texas will pay the United States $9.99 million to settle allegations that it defrauded CMS by improperly inflating charges to Medicare patients between January 2001 and August 2003 to receive enhanced reimbursement from CMS ( PR Newswire via Fox Business, 3/26 ). Travis County Health Care Provider Receives ARRA Funding : CommUnityCare and the Travis County Heal th C are District received the second largest of 65 ARRA - funded HHS grants awarded to Texas health care providers. The $966,000 grant will be used to expand services offered to the uninsured and underinsured in central Texas. CommUnityCare plans to add physicians, a nurse practitioner, a behavioral health counselor, and clinical support staff to its 16 locations in Travis County . CommUnityCare provides health care to over 50,000 Texans annually ( Austin Business Journal, 4/1 ). Virginia Governor Proposes Amending Bills to Help Unemployed: Governor Tim Kaine (D) has proposed amendments to numerous bills to expand assistance to Virginia222s recently unemployed and ensure that th e commonwealth is eligible for the $125 million ARRA funding for unemployment which it has not yet received. Among the governor222s proposed changes are: expanding unemployment eligibility to workers in training and those seeking part - time work ( SB 1495), e xtending unemployment benefits an additional 13 weeks ( HB 1889 ), requiring that insurance policies offered by small businesses include coverage for numerous conditions including mental health and substance abuse services ( SB 1411 ), and extending COBRA bene fits for Virginians employed by businesses with 20 employees or fewer to allow them access to the federal COBRA subsidy in the ARRA ( HB 2024 ) ( ABC, 3/30 ). Washington House and S enate Democ rats Propose Budget s , Cut Health Care : Senate Democrats proposed a budget on March 30 designed to close the state222s $9.3 billion deficit over the next biennium. In addition to relying on ARRA funds and increased taxes, the plan cuts $785 million from nume rous health programs including: reducing enrollment in Basic Health Plan, which provides health coverage to residents under SAMHSA222s Weekly Financing News Pulse April 6, 2009 4/6/09 15 200 percent of the FPL, by 42 percent (45,000 individuals); cutting the caseload for General Assistance - Unemployable , the program wh ich provides assistance to those who are physically or mentally disabled, by 20 percent; reducing hospital reimbursement rates by roughly five percent; capping premium rate increases for other providers at 2009 levels; pharma cy cost containment (see below) ; and reductions in local health funding contributions ( AP via Seattle Times, 3/30 ; Kaiser Daily Health Policy Report, 4/3 ). The budget would also likely increase state employees share of health benefit costs, and eliminate state vaccine payments for all but low - income children ( Seattle Times, 3/31 ). House Democrats released their budget the following day, March 31, which cuts nearly $30 million more than the Senate budget for a total of $814 million in health care cuts ( Seattle Times, 3/31 ). The details of the Senate and House proposal s are available on the legislature222s website . District Court Temporarily Blocks State from Cutting Medicaid Reimbursements for Brand- Name Drugs , Walgreen222s Threatens State : Governor Chris Gregoire (D) ordered a 6 percent reduction in Medi caid pharmacy reimbursements for brand- name prescription drugs slated to take effect April 1 to save the state $100 million through 2011. In response, Walgreens said it would withdraw 44 pharmacies from the state program on May 1. In addition, the Washin gton State Pharmacy Association , the National Association of Chain Drug Stores , and the National Community Pharmacists Association filed a lawsuit protesting the cuts and Judge Robert Bryan issued a temporary injunction blocking the cuts and scheduling a hearing on the matter for April 9 ( Kaiser Daily Health Policy Report, 4/2 ; AP via Seattle Times, 3/31 ). Governor Appoints New Leader for Social and Health Services : On March 31, Governor Chris Gregoire (D) named Susan Dreyfus the new secretary of the state Department of Social and Health Services . Drey fus is currently the executive vice president for strategy at Rogers Behavioral Health System Inc. and previously served as vice president and COO of the National Alliance for Children and Families and as an administrator of the Division of Children and Fa mily Services within the Wisconsin Department of Health and Family Services. Dreyfus will take over as secretary on May 18 ( AP via Seattle PI, 3/31 ). Bremerton Medical Center Closing Behavioral Health Unit : Harrison Medical Center is closing its 12 - bed behavioral health unit in Bremerton, Washington effective May 1. Medical center officials say the unit did not receive enough patients to be sustainable , but that men tal health patients needing care will be treated in the hospital222s general medical care units or facilities outside the hospital. The center is also attempting to establish a referral relationship with an outpatient care provider ( Kitsap Sun, 4/1 ). West Virginia Update: House Rejects Bill to Drug Test Welfare Beneficiaries : Last week222s Financing News Pulse (3/27 edition) highlighted numerous sta tes, including West Virginia, in which the legislature was considering laws mandating drug testing for individuals receiving public assistance. West Virginia222s bill to mandate drug testing for individuals receiving unemployment, food stamps, and other wel fare programs was rejected 30 - 70 by the House ( Charleston Daily Mail, 3/31 ).
