WeeklyFinancingNewsPulsefinal200900831.pdf (PDF | 332.80 kb)
SAMHSA222s Weekly Financing News Pulse August 31, 2009 8/31/0 9 1 National Health Financing News OMB, CBO Release Updated Budget Projections, Senate Finance Negotiators Hold Teleconference, Agree to Meet Senator Edward Kenne dy Dies; Special Election Will Fill Seat AHA Report Says Hospitals May Profit From Health Care Reform Rep. Waxman Seeks Modification to Medicare Part D to Reduce Health Costs Rep. Kucinich Asks Health Insurance CEOs to Testify on Health Care Administration Vice President Biden Announces $1.2 Billion in Health IT ARRA Funding HHS Secretary Announces $25.7 Million in Grants to Ex pand and Improve Health Centers Presidential Panel Warns of Potential Swine Flu Infections this Season States Pass Laws Expanding Parents222 Ability to Insure Adult Children Navy Ad justs Drug Policy, Increases Drug Testing and DUI Penalties Report Says Health Care Costs Will Increase 10 Percent Within One Year Polls Reveal Dwindling Faith in Health Care Reform, Confusion About Public Option AHRQ Releases Two Health Care Briefs Commonwealth Fund Report Examines State Insurance Premium Trends and the Prospects of National Health Care Reform AHCA Releases St ate - Level Estimates Medicare Cuts to Skilled Nursing Homes RWJF Releases Case Study of Texas222 Health Insurance Market KFF Releases Brief Examining Health Care Subsidies Around the H ill: Hearings on Health Financing Around the States: State and Local Behavioral Health Financing News Alaska California Colorado Delaware Illinois Iowa Maine Maryland Minnesota Mississippi Missouri New Mexico New York Pennsylvania Rhode Island Texas Utah Washington West Virginia Wisconsin Wyoming For quest ions or comments, please contact Sarah Wattenberg (sarah.wattenberg@samhsa.hhs.gov). SAMHSA222s Weekly Financing News Pulse August 31, 2009 8/31/0 9 2 National Health Financing News OMB, CBO Release Updated Budget Projections, Senate Finance Negotiators Hol d Teleconference, Agree to Meet : On August 25, the White House Office of Management and Budget (OMB) released updated 10 - year deficit projections estimating that the country will have a $9.05 trillion deficit in 2019, $2 trillion more than OMB estimated in February. The same day, the C ongressional Budget Office (CBO) also released updated deficit projections that, unlike the OMB222s, do not include President Barack Obama222s planned policy changes. The CBO projects that the deficit will rise to $7.1 trillion over the same period, up from a previous estimate of $4.4 trillion in March ( New York Times, 8/25 ). Numerous legislators, including Senate Finance Committee Ranking Member Charles Grass ley (R- IA), have cited the new estimates as a major hurdle for health care reform ( Kaiser Health News, 8/27 ). Meanwhile, the Senate Finance Committee negotiators, led by Senate Finance Committee Chair Max Baucus (D - MT), held a teleconference on August 20 and agreed to meet again before Congress reconvenes on September 8 ( CQPolitics, 8/21 ). However, with the September 15 deadline for a Finance Committee deal approaching (Financing News Pulse 8/10 edition), Congressional Democrats are considering tactics for passing health care reform without bipartisan agreement, including utilizing the budget reconciliation process ( Kaiser Health News, 8/25 ). Senator Edward Kennedy Dies; Special Election Will Fill Seat : After a lengthy battle with brain cancer, S enate Health, Education, Labor and Pensions (HELP) Committee Chair Edward 223Ted224 Kennedy (D - MA) died August 25. Though a new HELP Committee chairperson will not be selected until Congress reconvenes on September 8, Senate Banking Committee Chair Chris Dodd (D - CT), who shepherded health care legislation through the HELP Committee earlier this summer, is first in line for the position based on committee seniority. Should Dodd pass on the position, Senate Agriculture Committee Chair Tom Harkin (D - IA) is n ext in line, followed by Senator Barbara Mikulski (D - MD) ( Washington Post, 8/26 ). AHA Report Says Hospitals May Profit From Health Care Reform : A previously undisclosed report by the American Hospital Association (AHA) estimates that hospital groups may gain as much as $16 billion over a decade under President Obama222s health care reform plan. The report estimates that hospitals would earn an additional $171 billion over ten years from the Americans newly insured under health care reform. The $171 billion would outweigh the $155 billion in proposed cuts that the AHA, Federation of American Hospitals , and the Catholic Health Association (CHA) promise d in a deal with the White House and Senate Finance Committee officials on July 6 ( Bloomberg, 8/26 ; Kaiser Health News, 8/27 ; Financing News Pulse 7/13 edition). Rep. Waxman Seeks Modification to Medicare Part D to Reduce Health Costs: House Energy and Commerce Committee Chair Henry Waxman (D - CA) is seeking to modi fy the Medicare Prescription Drug Benefit Program (Part D)222s method for acquiring drugs for dually eligible Medicaid and Medicare enrollees. Under Medicaid, the government purchases drugs at a significant discount; however, under Part D, drugs for dual eligibles are purchased at the higher Medicare rates. According to a July 2008 analysis by the House Committee on Oversight and Government Reform , Medicare Part D pays an average of 30 percent more for dual eligibles than the government would pay if the drugs were purchased through Medicaid. Rep. Waxman has suggested procuring those drugs via Medicaid; however, the Pharmaceutical Researches and Manufacturers of America (PhRMA) argues t hat it violates the health care reform deal that they struck with the White House and senators and that it would significantly hurt their business ( New York Times, 8/25 ; Kaiser Health News, 8/26 ). SAMHSA222s Weekly Financing News Pulse August 31, 2009 8/31/0 9 3 Rep. Kucinich Asks Health Insurance CEOs to Testify on Health Care Administration : On August 26, Rep. Dennis Kucinich (D - OH), chairman of the Domestic Policy Subcommittee of the House Oversight and Government Reform Committee, sent letters to the CEOs of Aetna Inc. , Cigna Corp., Humana Inc. , UnitedHealth Group Inc., WellPoint Inc. , and other insurers requesting that they testify at a Sept ember 17 hearing regarding 223t he nature, cost/benefit, and impact of administrative measures and protocols used by the health insurance industry to determine coverage 224 ( Reuters, 8/26 ; Kaiser Health New, 8/27 ). Vice President Biden Announces $1.2 Billion in Health IT ARRA Funding : On August 20, Vice President Joe Biden and U.S. Department of Health and Human Services (HHS) Secretary Kathleen Sebelius announced $1.2 billion in American Recovery and Reinvestment Act (ARRA) grants for health IT programs. About $598 million of the grants will help establish 70 health IT regional exchange centers to provide technical assistance to providers converting to electronic health records (EHRs). The remaining $564 million will be allocated to states to support a nationwide EHR system ( Bloomberg, 8/20 ; Kaiser Health News, 8/21 ). HHS Secretary Announces $25.7 Million in Grants to Expand and Improve Healt h Centers : On August 23, HHS Secretary Kathleen Sebelius announced $25.7 million in grants to increase and improve health and support services at community health centers. The Health Resources and Services Administration (HRSA) will oversee the funding, w hich includes $21.9 million to expand existing health centers222 M/SU, oral health, pharmacy services, and outreach efforts and an additional 48 planning grants totaling $3.8 million to create new health centers. The press release provides details of the state s and organizations receiving grant funding ( HHS via Market Watch, 8/23 ). Presidential Panel Warns of Potential Swine Flu Infections this Season : On August 24, the President222s Council of Advisors on Science and Technology issued a report estimating that the H1N1 influenza virus (swine flu) could infect half the U.S. population over this fall and winter222s flu season. The report estimates that H1N1 could cause up to 1.8 million hospitalizations and 90,000 deaths 227 more than twice the average number for a typical flu season. The panel222s report recommends quickening the production of H1N1 vaccine to have 40 mil lion doses ready by mid - September, setting up surveillance systems to monitor the illness, and developing plans to protect the most vulnerable populations ( CNN, 8/24 ; Washington Post, 8/25 ; Kaiser Health News, 8/25 ). States Pass Laws Expanding Parents222 Ability to Insure Adult Children : The Wall Street Journal (WSJ) reports that more than 20 states have passed laws allowing parents to keep their adult children on their health insurance policies well into their twenties regardless of their student status. Most states222 laws require that the child be single and ineligible for other coverage ( Wall Street Journal, 8/23 ; Kaiser Health News, 8/24 ). Navy Adjusts Drug Policy, Increases Drug Testing and DUI Penalties : Under a new U.S. Navy policy implemented July 30, random drug testing will increase 50 percent and every sailor must be drug tested within 72 hours of reporting to a new command. Services members who test positive are immediately discharged. In addition, a second DUI offense now results in discharge and more commands are required to designate a senior member as an alcohol and drug control officer, responsible for securing access to prevention and treatment programs ( San Diego Union - Tribu ne, 8/26 ). SAMHSA222s Weekly Financing News Pulse August 31, 2009 8/31/0 9 4 R eport Says Health Care Costs Will Increase 10 Percent Within One Year : A report released August 25 by Aon Consulting , a subsidiary of Aon Corp. , estimates that the costs of employer - sponsored health plans will increase an average of 10.5 pe rcent over the next 12 months. The report, which is Aon based on a survey of roughly 60 health insurers around the country conducted earlier in 2009, attributes the increase to the aging workforce, growing demand for services, and rising costs. The report also estimates that prescription drug costs will rise 9.3 percent over the same period ( AP, 8/25 ). Polls Reveal Dwindling Faith in Health Care Reform, Confusion About Public Option : An ABC News/Washington Post poll, conducted August 13 - 17, found that disapproval of President Obama222s handling of health care reform has reached 50 percent while 42 percent of respondents report that they 223strongly disapprove224 of the president222s approach to health reform. The same poll also found that 52 percent of those polled support a public plan option while 46 percent oppose it ( Kaiser Health News, 8/21 ; Washington Post, 8/20 ). Meanwhile a poll conducted by Penn, Schoen, & Berland Associates August 12 - 13 25, found that, while nearly 80 percent of respondents favored a 223public option,224 fewer than 40 percent of respondents could correctly define such an option ( Denver Business Journal, 8/26 ). AHRQ Releases Two Health Care Briefs : The Agency for Healthcare Research and Quality (AHRQ) released Statistical Brief 78 , 223Hospitalizations in which Patients Leave the Hospital against Medical Advice (AMA), 2007,224 and Statistical Brief 2 56 , 223Trends in Health Care Expenditures for the Elderly Age 65 and over: 2006 versus 1996 .224 Statistical Brief 256 reports that health care spending on seniors rose by $106 billion from 1996 through 2006, reaching $333.3 billion in 2006, and that spending increased 66 percent on prescription drugs, 58 percent on physician visits, and 20 percent on hospital stays ( McKnight222s Long - Term Care News & Assisted Living, 8/28 ). Statistical Brief 78 found that patients who leave hospitals AMA fall into three major groups: those concerned about cost, those with substance abuse conditions, and those suffering from non - specific chest pain or diabetes complications ( U.S. News & World Report, 8/27 ). Commonwealth Fund Report Examines State Insurance Premium Trends and the Prospects of National Health Care Reform : On August 20, the Commonwealth Fund released a report , 223 Paying the Price: How Health Insurance Premiums Are Eating Up Middle - Class Incomes -- State Health Insurance Premium Trends and the Potential of National Reform ,224 examining state health insurance premium trends and the potential effec ts of health care reform on those premiums. The report estimates that, without health care reform, health care premiums could increase 94 percent by 2020 to an average of $23 ,842 per family. However, the report found that if health care reform slows prem ium growth by 1 to 1.5 percent, premiums could be $2,500 to $3,700 lower by 2020. The report also provides analysis of state- level insurance premium trends ( UPI, 8/24 ). AHCA Releases State-Level Estimates Medicare Cuts to Skilled Nursing Homes : The American Health Care Association (AHCA) released state- by - state estimates of the effects of Medicare cuts to skilled nursing homes under HR 3200 and the recently - enacted Medicare regulation that cuts Medicare nursing home funding by $12 billion over a decade ( Kaiser Health News, 8/27 ). RWJF Releases Case Study of Texas 222 Health Insurance Market : On August 24, the Robert Wood Johnson Foundation (RWJF) released a primer , 223 Post Claims Underwriting and Rescission Practices : Findings from Texas in the Individual Health Insurance Market.224 The primer examines the insurance SAMHSA222s Weekly Financing News Pulse August 31, 2009 8/31/0 9 5 practice of post - claims underwriting and rescission in Texas, concluding that consumers are vulnerable and that Texas state law fails to 223clearly and consistently224 reflect federal HIPPA standards. The primer also highlights lessons from the case study that have broader national impact ( Kaiser Health News, 8/27 ). K FF Releases Brief Examin ing Health Care Subsidies : On August 28, the Kaiser Family Foundation (KFF) released a brief , 223Explaining Health Care Reform: What Are Health Insurance Subsidies,224 examining different cost - sharing and premium subsidy methods with a focus on subsidies currently under consideration for individuals purchasing health plans through an insurance exchange ( KFF, 8/28 ). Around the Hill: Hearings on Health Financing Congress is out of session for the August recess and will reconvene Tuesday, September 8. Around the States: State and Local Behavioral Health Financing News Alaska Update: CMS Allows Exceptions for Waiver Freeze, State Announces Plan to Lift Moratorium : On June 26, the Centers for Medicare & Medicaid Services (CMS) suspended enrollment in Alaska222s Medi caid waiver program for home and community - based care because the state failed to assess and reassess eligibility in a timely manner (Financing News Pulse 7/13 edition). However, CMS has announced that Alaska may enroll residents in the program under emergency conditions including terminal diagnoses of six months or less, the death of a primary care giver within 90 days, an emergency absence of a primary care giver, and certain adult or child services referrals. In addition, the Alaska Department of Healt h and Social Services (DHSS) announced a plan for the state to eliminate the moratorium by addressing the issues highlight ed by CMS and the newly created backlog of cases ( Junea u Empire, 8/25 ). In related news, a class action lawsuit was filed in federal court against HHS Secretary Kathleen Sebelius and DHSS Commissioner Bill Hogan over the imposition and subsequent acceptance of the moratorium ( Anchorage Daily News, 8/20 ). California State Funding Reductions Force San Joaquin Valley Counties to Cut Mental Health Funding : After Governor Arnold Schwarzenegger (R) cut $64 million from managed care funding as part of his plan to eliminate the state222s budget gap (Financing News Pulse 8/3 edition), counties throughout the San Joaquin Valley are cutting mental health services. Fresno County will cut managed care funding by 50 percent, to $4.9 million. The loss repres ents 7 percent of the county222s mental health budget and will force the county to delay creation of a psychiatric unit for adults and end a children222s mental health program. In addition, California counties will face additional mental health cuts when the state announces details of $52 million in deferred county payments for emotionally disturbed youth and $28 million in cuts for early treatment programs ( AP via San Jose Merc ury News, 8/23 ; Fresno Bee, 8/22 ). San Mateo Renews Behavioral Health Senior Peer Counseling Grant : The San Mateo County Behavioral Health and Recovery Services Division has renewed a on e- year $283,140 grant to the Family Service Agency of San Mateo County to train volunteers to provide free one - on - one peer counseling for seniors SAMHSA222s Weekly Financing News Pulse August 31, 2009 8/31/0 9 6 and the LGBT community. The Mental Health Services Act funds the grant ( Silicon Valley/San Jose Business Journal, 8/25 ). State Cuts Force the Closure of Palo Alto Intermediate Care Facility : Casa Olga, an 88 - resdient intermediate care facility that houses seniors, disabled pe rsons, and persons with mental illness in Palo Alto, California, has announced plans close because of state budget cuts. Former Governor Ronald Reagan (R) created intermediate care facilities to provide less expensive care to ambulatory patients who would ordinarily be placed in nursing homes and skilled care facilities. The 88 residents of Casa Olga will be transferred to other facilities, likely moving to higher levels of care ( Pa lo Alto Online, 8/21 ). KFF Survey Finds Enrollees Satisfied with Healthy San Francisco : A KFF survey , conducted March 2009, found that 94 percent of enrollees in San Francisco222s health care access program, Healthy San Francisco, were at least 223somewhat satisfied224 with the program and that 92 percent would recommend the program to a friend and think other cities should create similar programs ( KFF, 8/26 ). Healthy San Francisco was involved in controversy earlier this year after the Golden Gate Restaurant Association sued the city for violating the Employee Retirement Income Security Act (ERISA) by mandating contributions to the program under certain conditions. The association lost its case and has requested a hearing in the U.S. Supreme Court (Financing News Pulse 6/15, 5/6, 5/4, 3/13 editions ). Colorado El Paso County Opens Detox Center : After closing its detox center in January be cause of funding difficulties, El Paso County has opened a new detox facility affiliated with the county222s criminal justice center. The facility, which is funded through the Colorado Division of Behavioral Health and Memorial and Penrose hospitals, is temporarily located at the sheriff222s metro office until a permanent facility can be constructed at the criminal justice center ( KRXM, 8/20 ). Geriatric Psychiatric Unit to Move, Transition to Combat Veteran Unit : Beginning September 1, the Haven Behavioral Health Senior Care Clinic at Mary - Corwin Medical Center will stop admitting new geriatric patients and will refer and transport patients to a new 22 - bed geriatric psychiatric center at Denver222s North Valley Hospital. Haven will convert the current Senior Care Clinic to treat combat stress disorder among war veterans ( Pueblo Chieftain, 8/22 ). Delaware Pharmacy Groups Reach Agreement with State Over Medicaid Reimbursements, Drop Lawsuit : On August 25, the National Association of Chain Drug Stores and the National Community Pharmacists Association reached an agreement with the Delaware Department of Health and Social Services (DHSS) over the state222s brand - nam e Medicaid reimbursement rates. The agreement came after the groups filed lawsuit challenging the state222s April 1 cuts (Financing News Pulse 8/13, 7/13, 6/22, 6/8 editions) . Walgreens Inc. , which had threatened to pull out of the state Medicaid program after the DHSS announced the rate reduction from 86 percent of the average wholesale price to 84 percent, reached a separate deal with DHSS that took effect after the associa tions agreed to drop the lawsuit. Under the deals, which take effect October 1, the Medicaid program will reimburse brand - name drugs at 85.5 SAMHSA222s Weekly Financing News Pulse August 31, 2009 8/31/0 9 7 percent of the average wholesale price and the state will make up the difference through generic drug reimbursemen t changes. DHSS Secretary Rita Landgraf says the deals obtain the state222s desired budget savings ( Reuters, 8/25 ; News - Journal, 8/26 ; Insurance & Financial Advisor, 8/26 ). Illinois Chicago Public Health Commissioner Says City Will Keep All Mental Health Clinics Open: On August 26, a representative of the Chicago Public Health Department announced that the city was considering closing five of its 12 mental health facilities in the face of budget cuts that include a reduction in annual state funding from $8.4 million to $4.2 million ( Chicago Tribune, 8/26 ). However, on August 27, Chicago Department of Public Health Commissioner Terry Mason said that the city has no plans to close any of its mental health clinics ( WGN, 8/27 ). Earlier this year, four of the five clinics in question were temporarily shut down because of a billing problem between the city and the state of Illinois . O nly a fraction of the laid off employees have been rehired (Financing News Pulse 7/6, 4/20, 4/13 editions). Vermilion County to Eliminate Four Health Positions : As a result of reduced state funding, Vermillion County222s Health Department will eliminate two registered nurses, an environmental health position, and a data entry clerk before December 1 to save the department $132,651 during FY2010. In addition, the department has eliminated all non- union wage increases to save over $115,000 during the current fiscal year ( News Gazette, 8/24 ). Iowa Hospital Settles Medicare Fraud Case: Covenant Medical Center in Waterloo struck a deal with the U.S Department of Justice (DOJ) to settle allegations that the hospital used Medicare funds to pay doctors significantly more than market value to refer patients to the hospital. Under the deal, Covenant agreed to pay $4.5 million but admitted no wrongdoing ( AP via Chicago Tribune, 8/25 ). Maine Governor Signs Two Health Bills: On August 24, Governor John Baldacci (D) held a ceremonial signing for two health care bills. The governor signed a 223Health Care Bill of Rights,224 which he said will improve transparency and provide the public with more information on health care cost and quality. The governor also signed a bill increasing th e state insurance superintendent 222s power to oversee rates, allowing consumers to more easily compare healt h insurance products, and requiring insurance companies to provide clear benefit statements ( AP via Boston Globe, 8/25 ; Kaiser Health News, 8/26 ). Maryland Board of Public Works Approves Governor222s Cuts, Medicaid and Mental Health Affected : On August 26, the Maryland Board of Public Works approved Governor Martin O222Malley 222s (D) $454 million package of spending cuts. The package cuts $210.7 million form aid to local governments, including a $20.1 million reduction to local health services. The package also include s a $21 million reduction in Medicaid payments to numerous providers including hospitals, managed care organizations, and community health care providers. However, the package redirects $12 million from the Cigarette Restitution Fund to the state222s Medicaid program to o ffset some of those cuts. In addition, the package reduces funding for the Maryland Department of Health and Mental Hygiene by $90 million, closes a SAMHSA222s Weekly Financing News Pulse August 31, 2009 8/31/0 9 8 40- bed psychiatric hospital, and consolidates several state health facilities to save $7.2 million ( Washington Post, 8/25 ; Baltimore Business Journal, 8/2 6 ; Washington Post, 8/27 ; Kaiser Health News, 8/27 ; Baltimore Business Journal, 8/27 ). Minnesota New Website Allows Patients to Compare Health Care Providers : On August 26, non - pro fit Minnesota Community Measurement unveiled a website that lists the prices charged by 110 medical groups across the state, including 80 to 85 percent of the state222s primary care providers. The organization designed the website to help consumers compare the cost and quality of health care providers in the state ( Kaiser Health News, 8/27 ). Mississippi CMS Approves Expanded Participation in MYPAC Medicaid Waiver Program : CMS has approved Mississippi222s request to expand participation in the Mississippi Youth Programs Around the Clock (MYPAC) grant program, funded through the MYPAC Medicaid waiver. The MYPAC program provides services for emotionally disturbed youth as an alternative to residential treatment ( Clarion - Ledger, 8/21 ). Missouri Governor A nnounces $60 Million in Cuts : On August 20, Governor Jay Nixon (D) announced $60 million in planned spending cuts that were included in the state budget signed in June. The cuts reduce funding for the Missouri Department of Social Services by $16 million and eliminate 1,244 government positions. Because the cuts are actually budget withholdings, the state may reallocate the funding if state revenues increase ( AP via Kansas City Star, 8/20 ). DSS Estimates Costs of Medicaid Expansions Under Health Care Reform : The Missouri Department of Social Services (DSS) reported that, as of June 2009, 14.7 percent of the state222s 5.9 million residents were enrolled in the state222s Medicaid progr am, MoHealthNet. The program currently costs $7.2 billion annually with $1.5 billion coming from the state222s general fund and another $1.8 billion from other state funding sources. DSS estimates that, under the U.S. House health care reform bill ( HR 3200 ), which raises the Medicaid eligibility level from Missouri222s current 20 percent of the federal poverty level (FPL) to 133 percent of the FPL, an additional 249,832 residents would become eligible for the program, raising the cost by roughly $1.1 to $1.3 billion annually ( Springfield News - Leader, 8/24 ). New Mexico Governor and Human Services Secretary Ponder Medicaid Cuts : With New Mexic o222s Medicaid program facing a budget shortfall that is expected to reach $300 million next year, Governor Bill Richardson (D) and Human Services Secretary Pam Hyde are considering Medicaid cuts ranging from benefit elimination to provider reimbursement reductions. State legislators plan to meet in a special session this fall to consider spending cuts to balance the current - year $5.5 billion budget ( AP via ABC, 8/22 ). SAMHSA222s Weekly Financing News Pulse August 31, 2009 8/31/0 9 9 New York Rock land County Launches Veterans M/SU Court : On August 26, Rockland County Officials announced the creation the Veteran222s Alternative to Incarceration program, a court designed for veterans of the Iraq and Afghanistan wars with M/SU conditions who commit non - violent crimes. The U.S. Department of Veterans Affairs will fund treatment and counseling through the program ( Lower Hudson Valley Journal - News, 8/27 ) Pennsylvania Independence Blue Cross Elim inates Two Medicare Advantage Plans : Beginning January 1, Independence Blue Cross (IBC) will stop offering two Medicare Advantage Plans, Keystone 65 Complete and Keystone Value 65. Keystone Value 65 previously provided special needs coverage to enrollees in Bucks, Chester, Delaware, Montgomery, and Philadelphia Counties. The company estimates that the change will affect 36,000 members but notes that members failing to select a new plan will retain traditional Medicare coverage. IBC cites lower government reimbursements and increased cost as the prime reasons for eliminating the plans (Insurance & Financial Advisor, 8/25 ). Aetna Seeks to Enter Medicaid Managed Care Market : Aetna Inc.222s Medicaid Division, Aetna Better Health, filed applications with the Pennsylvania Department of Health and the Pennsylvania Department of Insurance to establish and operate an HMO in 15 counties in southeastern Pennsylvania. The new Aetna offerings would participate in the Department of Public Welfare222s Medicaid managed care program, Health Choices ( Philadelphia Business Journal, 8/21 ). Keystone Mercy Health Plan Terminates Contract with Chester County Hospital : The Chester County region222s largest Medicaid HMO, Keystone Mercy Health Plan, announced that it will end its relationship with Chester County Hospital September 30 becau se the commercial payment levels required are too much higher than state - funded Medicaid managed care rates. Keystone is co - owned by Independence Blue Cross and Mercy Health System . Chester County Hospital began a new provider agreement with AmeriChoice, a managed care plan owned by UnitedHealthcare , on August 1 ( Philadelphia Business Journal, 8/26 ). Rhode Island Governor to Furlough Employees, Requests Permission to Unilaterally Cut Spending : The budget passed by the Rhode Island Legislature earlier this year (Financing News Pulse 7/6 edition) included plans for Governor Donald Carcieri (R) to make $67.8 million in mid - year cuts to balance the state222s budget. Gov ernor Carcieri announced August 24 that he plans to furlough state workers for 12 days and is seeking approval from the legislature to make unilateral cuts from the budget. If approved by the legislature, the governor plans to cut $33 million in payment to local governments ( AP via USA Today, 8/24 ; Providence Business News, 8/24 ). Texas El Paso Extends Health Benefits to Homosexual Employee Partners : In a seven to one vote on August 25, the El Paso City Council voted to extend city employee health benefits to domestic partners, SAMHSA222s Weekly Financing News Pulse August 31, 2009 8/31/0 9 10 i ncluding same - sex couples. City officials estimate that the new benefits will cost up to $390,000 ( FOX, 8/25 ). Utah Audit Finds Medicaid Program Wasteful, Oversight Not Sufficiently Indepe ndent : An audit released August 18 by the Utah Legislature222s Auditor General, found that Utah222s M edicaid program wastes millions of dollars and that its three internal auditors are not sufficiently independent to conduct adequate audits. The report audite d Medicaid222s Bureau of Program Integrity, finding that the current audit uses software from 1987 and analyzes only 5 percent of Medicaid claims. The report estimated that the state could recover an additional $20 million in state and federal funds with mo re stringent oversight of fraudulent provider billings and payments for unauthorized procedures ( Salt Lake Tribune, 8/18 ). Salt Lake City VA Awards PHC Behavioral Health Contract : The Salt Lake City Veterans Administration (VA) Medical Center has awarded Pioneer Behavioral Health (PHC) a contract to provide behavioral health services at the company222s Highland Ridge Hospital in Salt Lake City. The contract is for nine months and $1.24 million with subsequent six - month renewal periods for $792,000. In addition to the eight psychiatric beds covered under the agreement, PHC may also receive additional revenue from beds provided on fee - for - service (FFS) basis ( Business Wire, 8/25 ). Washington DSHS Consolidates M/SU Services in New Division ; Transfers Some Services to Private Providers: On August 20, the Washington Department of Social and Health Services (DSHS) announced the creation of a new Division of Behavioral Health and Recovery that combines the previous Division of Alcohol and Substance Abuse and the Division of Mental Health. The new division, headed by former alcohol and substa nce abuse director David Dickinson, will integrate M/SU and problem gambling services while seeking a person - centered approach to health care ( DSHS, 8/20 ). In related DSHS news, the department will privatize some mental health care through a partnership with OptumHealth in Peirce County. The deal will increase the share of federal funds available for mental health care, closing the county222s public program and replacing it with numerous smaller private programs ( Tacoma Daily Index, 8/21 ). West Virginia State Settles Medicaid Suit With Eli Lilly, Receives Funds for Behavioral Health: On August 20, West Virginia authorities released the details of a Medicaid settlement with Eli Lilly & Co . over allegations that the company improperly marketed its antipsychotic drug, Zyprexa. Under the terms of the settlement, Eli Lilly admitted no wrongdoing but agreed to pay $14.75 million for behavioral health care, $1 million for consumer protections, and $6.75 million to West Virginia222s lawyers. West Virginia health officials will likely give the money to one- time expenses like new group hom es rather than recurring expenses like M/SU Medicaid reimbursement rates ( AP via Charleston Daily Mail, 8/24 ). Under the terms of an unrelated lawsuit , the state has already agreed to fund the cr eation of numerous behavioral health facilities which are likely to receive funding from the Eli Lilly settlement (Financing News Pulse 8/ 10, 7 /16, 5/4 editions). SAMHSA222s Weekly Financing News Pulse August 31, 2009 8/31/0 9 11 Wisconsin Bill Introduced to Impose Age Limit on Children Drinking with Parents : On August 19, a bill was introduced in the Wisconsin Senate222s Committee on Children and Families and Workforce Development that would alter the state222s law that allows children of any age to drink alcohol in a tavern when accompanied by a parent. The bill would re quire that children be 18 years old to drink alcohol in a public establishment even in the presence of a parent ( Wausau Daily Herald, 8/24 ). Wyoming Sub lette County M/SU Agencies Merge: Because of significant funding reductions from the state of Wyoming, the Sublette County Rural Health District, and private donors, High County Behavioral Health, the Curran - Seeley Foundation, and Pine Creek Family Counseling plan to merge September 2009 ( Little Chicago Review, 8/26 ).
