WeeklyFinancingNewsPulsefinal20090227.pdf (PDF | 442.00 kb)
SAMHSA222 s Weekly Financing News Pulse February 27, 2009 2/27/09 1 Table of Contents National Health Financing News President Obama Proposes Budget with $634 Billion For Universal Health Care Over 10 Years Obama Releases $15 Billion in Medicaid Stimulus Funding House Approves Omnibus Appropriat ions Bill President Obama Addresses Congress Tuesday, Discusses Health Reform White House Summit on Fiscal Responsibility Governors Discuss Whether to Accept Stimulus Funds Legislators Discuss Health Reform The Centers for Medicare and Medicaid Service (CMS) Publish Health Spending Projections Through 201 8 CMS Orders WellCare to Stop Enrollm ent in Medicare Plans CMS Estimates 0.5 Percent Increase In Medicare Advantage Growth Rate for 2010 Medicare Spending Continues to Vary Significantly by Region Stud y Reports Mental Health Patients Experience Severe Barriers to Follow - Up Care Experts Tell Senate Health, Education, Labor, and Pensions (HELP) Committee that Many Americans Forego Health Care Due to Cost, Kaiser Family Foundation Releases Report Employers Expect Steady Rise in Health Care Costs United Auto Workers (UAW) Agrees to Allow Ford to Pay Retiree Health Care Fund with Stock Delphi Receives Permission t o Stop Paying Retiree Health Benefits Senators Introduce Bill to Expand Substance Abuse Treatment in the Military Military Contracts Vangent to Enhance the Military Health System for Behavioral Health Military Opens Mental Health Clinic In Afghanistan Around the Hill: Hearings on Health Financing Around the States: State and Local Behavioral Health Financing News Alabama Arizona California Colorado Connecticut Delaware Florida Idaho Indiana Iowa Kansas Kentucky Louisiana Maryland Massachusetts Michigan Minnesota Mississippi Missouri Nebraska Nevada New Jersey New Mexico New York North Carolina Ohio Oklahoma Pennsylvania Rhode Island South Carolina Texas Utah Vermont Virginia West Virginia Wisconsin For questions or comments, please contact Sarah Wattenberg (sarah.wattenberg@samhsa.hhs.gov). SAMHSA222s Weekly Financing News Pulse February 27, 2009 2/27/09 2 National Health Financing News President Obama Proposes Budget with $634 Billion For Universal Health Care Over 10 Years : On Thursday President Barack Obama unveiled his 2010 budget proposal which includes the creation of a 10 - year $634 billion reserve fund to help finance universal health care. Obama222s budget does not give specific plans for expanding health coverage but, instead, focuses on ensuring that significant funding will be in place for overhaul which most experts predict will cost over $1 trillion. Half of the reserve fund will come from $300 billion in reduced health spending while the other half will come from scaling back tax deductions for wealthier Americans. The proposal also includes some policy changes designed to improve the quality and efficiency of health care ( Kaiser Daily Health Policy Report, 2/26 ; Washington Post, 2/26 ). President Obama222s proposal is available at the White House222s Office of Management and Budget (OMB) website . o Spending Cuts: The spending cuts will include $177 billion saved by reduced subsidies for health insurance companies which operate Medicare Advantage plans and introducing introduction of a competitive bidding process for MA plans, $19.5 billion saved by increasing the 15 percent rate that pharmaceutical companies pay for Medicaid prescriptions to 21 percent, and increased payments for Medicare prescription drug coverage for wealthier beneficiaries ( Wall Street Journal, 2/26 ). o Tax Revenue: In addition to rais ing the top income tax rate for couples with incomes over $250,000 a year from 35 percent to 39.6 percent, President Obama222s budget proposal would reduce the value of itemized deductions for tax payers making over $250,000 annually to raise a combined $300 billion over 10 years ( Los Angeles Times, 2/26 ; Kaiser Daily Health Policy Repot, 2/26 ). o Health Policy Changes: In addition to raising the $634 billion for the health reserve fund, President Obama222s budget outlines policy changes designed to improve the quality and efficiency of health care. President Obama proposes that Medicare pay hospitals a flat free for patients222 first hospitalization and 30 - day follow - up care in place of the current fee - for- service system. The proposal also ends 223evergreening224, the practice through which drug companies reformulate brand - name drugs t o extend patents, and clears the way for generic versions of biotechnology medications ( Boston Globe, 2/26 ; Kaiser Daily Health Policy Report, 2/26 ). o Department Health and Human Services (HHS) Funding: Obama222s budget allocates $76.8 billon to HHS including $1 billion to the Food and Drug Administration to prevent and control foodborne illness and $6 billion for cancer research ( Reuters, 2/26 ). The budget also invests $330 million to increase the number of health professionals in areas of the country currently experiencing shortages. HHS budget highlights are available on the OMB website . Obama Releases $15 Billion in Medicaid Stimulus Funding : On Wednesday $15 billion for state Medicaid programs, the first round of stimulus package funding, began flowing to states through special Treasury Department accounts which allow immediate access to federal funds. SAMHSA222 s Weekly Financing News Pulse February 27, 2009 2/27/09 3 As President Obama informed state gover nors about his plan on Monday, he cautioned them that his Administration will monitor the use of stimulus funds closely to ensure that they are spent appropriately and quickly ( AP, 2/24 ; Kaiser Daily Health Policy Report, 2/24 ). House Approves Omnibus Appropriations Bill: The House approved the Omnibus Appropriations Bill ( HR 1105) Wednesday which includes the FY2009 budget for HHS. HHS has been funded at 2008 levels under a continuing resolution since October 2008. The appropriations bill, which may not go to the Senate until next week, would increase the department budge t by roughly eight percent ( Kaiser Daily Health Policy Report, 2/26 ; AP via USA Toda y, 2/25 ). President Obama Addresses Congress Tuesday, Discusses Health Reform : In his speech to Congress on Tuesday, President Obama said that rising health care costs have hurt the economy and he charged Congress with overhauling the U.S. health care sy stem this year. President Obama promised to expand access to health care and limit health care costs; however, his speech did not include specifics which he suggested would be included in his budget proposal released on Thursday ( Kaiser Daily Health Policy Report, 2/25 ; New York Times, 2/25 ; Bloomberg, 2/25 ). White House Summit on Fiscal Responsibility : As a prelude to his Thursday budget announcement, President Obama held a fiscal responsibility summit at the White House on Monday where he and Peter Orszag, Director of the White House Office of Management and Budget, highlighted health care reform as the c rucial piece of fiscal responsibility. President Obama previewed his budget which targets Medicare spending as a way to reduce the deficit and also announced an additional White House summit on health care scheduled for the first week of March ( Kaiser Daily Health Policy Report, 2/24 ). Governors Discuss Whether to Accept Stimulus Funds : At a National Governors Association meeting, governors discussed the pros and cons of accepting federal stimulus funds. Republican governors from Alaska, Idaho, Louisiana, Mississippi, South Carolina, and Texas expressed concerns over requirements which accompany federal funds and suggested that they may reject some of the federal funding, including funds for Medicaid. Republican governors from California, Florida, and Utah said they plan to accept all of the money ( Kaiser Daily Health Policy Report, 2/23 ; New York Times, 2/20 ). Legislators Discuss Health Reform : House Energy and Commerce Health Subcommittee Chair Frank Pallone (D - NJ) s aid that he does not expect Congress to pass one single piece of health care overhaul legislation. He believes that health care reform will come in three stages: upgrading Medicare and Medicaid, increasing employer-sponsored health plans, and developing a federal option for health coverage. Senator Chris Dodd (D - CT) said his goal is to pass health care overhaul in the Senate by Memorial Day ( Kaiser Daily Health Policy Report, 2/24 ). At a hearing on Wednesday Senate Finance Committee Chair Max Baucus (D - MT) anticipated that the Congressional Budget Office (CBO) will play a crucial rule in comprehensive health reform because the agency222s cost assessment will provide valuable information to Congress ( Kaiser Daily Health Policy Report, 2/26 ). SAMHSA222 s Weekly Financing News Pulse February 27, 2009 2/27/09 4 The Centers for Medicare and Medicaid Service (CMS) Publish Health Spending Projections Through 2018: CM S published a report projecting that health care expenditures will increase 5.5 percent from 2008 to $2.5 trillion in 2009 and account for 17.6 percent of the GDP. The study also estimates the average per - person health care costs will increase $356 to $8, 160 in 2009. CMS estimates that public health spending will increase by 7.4 percent while private health spending will increase by 3.9 percent ( Kaiser Daily Health Policy R eport, 2/24 ; Reuters, 2/24 ; AP, 2/24 ). The study is available on the Health Affairs website . CMS Orders WellCare to Stop Enrollment in Medicare Plans : WellCare Health Plans Inc. is the second managed care provider this year which CMS has ordered to cease enrolling customers in Medicare drug and medical plans. CMS regulators cited numerous problems with WellCare including deceptive sales practices, dela ys for urgent customer problems, forged enrollment documents, and the highest complaint rate of all Medicare plans. The enrollment suspension begins March 7, 2009 but will not affect current WellCare enrollees. WellCare has about 261,000 Advantage member s and roughly 1 million drug-plan members ( Tampa Bay Online via MSNBC, 2/20 ; Bloomberg, 2/19 ; Kaiser Daily Health Policy Report, 2/23 ). CMS Estimates 0 .5 Percent Increase In Medicare Advantage Growth Rate for 2010: On Friday, CMS announced a preliminary estimate that the National Per Capita Medicare Advantage Growth Percentage for 2010 would increase 0.5 percent. The increase takes into account a scheduled 20 percent reduction in Medicare reimbursements to physicians for the coming year; however, Congress has prevented those reduction s in the past. America222s Health Insurance Plans warned that Advantage plans may experience decreased reimbursements as a result. CQ HealthBeat reports that Congress is unlikely to reduce Medicare reimbursements to Advantage plans until 2011 because the bi dding process for 2010 is still ongoing ( Kaiser Daily Health Policy Report, 2/24 ; CNN, 2/23 ). Medicare Spending Continues to Vary Significantly by Region : An analysis by Dartmouth Atlas Project published in the New England Journal of Medicine (NEJM) found that Medicare spending varies dramatically by region and attributed the difference to individual physicians increasing costs based on the quantity of medical services they provide ( Kaiser Daily Health Policy Report, 2/26 ). The st udy is available on NEJM website . Study Reports Mental Health Patients Experience Severe Barriers to Follow -Up Care : A study by the University of Pennsylvania School of Medicine found that two - thirds of patients referred to mental health care after emergency room visits reached voicemails when seeking follow - up assistance. In contrast, only 20 percent of individuals seeking general medical follow - up assistance failed to reach a person on the phone. In addition, only 10 percent of calls to mental health clinics yielded an appointment within two weeks of the call. The study also found that even clients with private insurance were only able to make mental health appointments two - thirds of the time they reached clinic staff as compared with 33 percent for Medicaid patients ( Newswise, 2/24 ). The study abstract is available on the Annals of Emergency Medicine website . SAMHSA222 s Weekly Financing News Pulse February 27, 2009 2/27/09 5 Experts Tell Senate Health, Education, Labor, and Pensions (HELP) Committee that Many Americans Forego Health Care Due to Cost, Kaiser Family Foundation Releases Report: At a HELP Committee hearing on Tuesday, expert witnesses from the Commonwealth Fund as well as the Kaiser Family Foundation discussed underinsurance in America. Senator Jeff Bingaman (D - NM) defined underinsurance as a situation where an insured individual pays 10 percent or mo re of his or her total income on health expenditures or has a health plan with deductibles greater than 5 percent of his or her income. Representatives from the Commonwealth Fund testified that an estimated 25 million American adults under age 65 are unde rinsured ( Kaiser Daily Health Policy Report, 2/26 ). On Thursday the Kaiser Family Foundation released the results of a poll which found that 53 percent of residents said the ir family cut back on health care due to cost ( Kaiser Daily Health Policy Report, 2/25 ). The poll is available on the Kaiser Family Foundation website . Employers Expect Steady Rise in Health Care Costs: Watson Wyatt and the National Business Group on Health found that large employers expect health care costs will continue to rise 6 pe rcent in 2009 as they did in 2008. The survey also found that more large employers plan to offer consumer - directed plans in 2010 in an effort to control cost increases. An estimated 160 million Americans get their health insurance through their employer ( Reuters via MSNBC, 2/19 ). United Auto Workers (UAW) Agrees to Allow Ford to Pay Retiree Health Care Fund with Stock : The UAW announced a tentative agreement with Ford on Monday in which Ford would pay u p to half of the $13.6 billion owed to a retiree health care fund in company stock rather than cash ( Kaiser Daily Health Policy Report, 2/24 ; New York Times, 2/23 ). UAW President Ron Gettelfinger urged UAW members to approve the deal to avoid precipitating the company222s collapse ( Kaiser Daily Health Policy Report, 2/25 ). Delphi Receives Permission to Stop Paying Retiree Health Benefits : A judge has granted Delphi Crop., which has been operating under Chapter 11 bankruptcy protection since 2005, permission to stop paying for its salaried retiree222s health and life insurance benefits. However, the judge instructed the 15,000 affected retirees to form a committee to determine whether certain individuals have special claim to their benefits. The committee will present its findings to the court on March 11 ( AP, 2/24 ; Detroit News, 2/24 ). Senat ors Introduce Bill to Expand Substance Abuse Treatment in the Military : Senators Claire McCaskil (D - MO) and Bob Corker (R - TN) introduced a bill Tuesday which requires review and study of existing substance abuse programs in the military and mandates that t he Department of Defense (DOD) submit a plan to prevent, diagnose, mitigate, treat, and rehabilitate service members suffering from substance use disorders. The bill also creates a center of excellence for substance abuse within the DOD and mandates an independent study of substance abuse in the U.S. armed forces ( Navy Times, 2/24 ; Kansas City Star, 2/24 ). Military Contracts Vangent to Enhance the Military Health System for Behavioral Health : Under a new $14.1 million task order, Vangent Inc. will work with the DOD222s Military Health System to enhance the collection of traumatic brain injury and behavioral he alth SAMHSA222 s Weekly Financing News Pulse February 27, 2009 2/27/09 6 information for service members throughout the continuum of care. Among other improvements, Vangent will integrate its newly collected information with the military222s current electronic health records. The program comes in response to the President222s Commission on Care for America222s Returning Wounded Warriors ( Washington Technology, 2/23 ; MarketWatch, 2/23 ). Military Opens Mental Health Clinic In Afghanistan: The United States military opened its first mental health clinic for troops in Afghanistan, the Bagram Freedom Restoration Center. Previously, soldiers could either take a few days of light duty or be transported to Germany or the United States for extensive mental health treatment. The new facility offers soldiers a chance to get serious mental health treatment in Afghanistan and return to the field more quickly ( Air Force Link, 2/23 ). Around the Hill: Hearings on Health Financing House and Senate Veteran s222 Affairs Committee s : Legislative Presentations of Veterans222 Service Organizations 2 p.m. Feb. 24, 345 Cannon 10 a.m. March 5, 106 Dirksen 10 a.m. March 12, 106 Dirksen 9:30 a.m. March 18, 334 Cannon Senate Health, Education, Labor & Pensions Committee : Integrative Health and Health Care Revision 2 p.m. Feb. 23, 430 Dirksen Senate Finance Committee : Scoring Health Care Reform: CBO222s Budget Options 10 a.m. Feb. 25, 215 Dirksen Senate Health, Education, Labor & Pensions Committee: Integrative Health C are 10 a.m. Feb 26, 430 Dirksen House Veterans Affairs Subcommittee on Health: Veterans222 Health Bills 10 a.m. March 3, 334 Cannon House Appropriations Subcommittee on Defense: Defense Psychological Health and Traumatic Brain Injury Programs 10 a.m. March 3, H - 140 Capitol Senate Special Aging Committee: Health Care Revision and the Elderly 10 a.m. March 4, 562 Dirksen Around the States: State and Local Behavioral Health Financing News Alabama Jury Orders Sandoz to Pay State for Medicaid Overcharging: A jury ordered Sandoz, a subsidiary of Novartis, to pay $28.4 million to compensate Alabama222s Medicaid program for losses resulting from prescription drug overcharging, and an additional $50 millio n in punitive SAMHSA222 s Weekly Financing News Pulse February 27, 2009 2/27/09 7 payments totaling $78.4 million for the state. Sandoz is one of more than 70 drug companies sued by Alabama in 2005. Numerous cases have been ruled on by lower courts and appealed to the Alabama Supreme Court and the state has settled 10 la wsuits for nearly $35 million ( AP, 2/24 ; Kaiser Daily Health Policy Rep ort, 2/25 ). Alabama Quality Assurance Foundation (AQAF) Wins Medicaid Contract : AQAF has won a two - year $1.3 million contract to provide Medicaid quality assurance reviews. AQAF also serves as the Medicare quality improvement organization for Alabama th rough a contract with CMS ( Birmingham Business Journal, 2/26 ). Arizona LifeWise Health Plan to Withdraw from Arizona Insurance Market : LifeWise Health Plan of Arizona will shut down on June 30 because it failed to reach the 50,000 enrollees necessary to be profitable. Blue Cross Blue Shield (BCBS) of Arizona will allow the plan222s 16,000 members to enroll with BCBS without further medical underwriting ( Phoenix Business Journal, 2/20 ). California Report Says California Not Planning for Retiree Health Care: California currently owes $48.2 billion for state employee222s retirement health care and is paying only the minimum needed to cover annual retiree health costs. The state program will cost $3.7 billion in the current fiscal year but a report by the actuarial firm Gabriel Roeder Smith & Co. says that if the state continues paying only the current - year obligation, the annual payments will increase to $5.3 billion and the total obligation will rise to $71 billion in the next 10 years ( Sacramento Bee, 2/25 ). Effects of Budget Cuts on Medicaid: The budget signed by Governor Arnold Schwarzenegger (R) shifts $54 million from county and UC hospitals, eliminates $24.7 million paid to counties for processing Medicaid eligibility, and, if approved by voters, directs mental h ealth and children222s services money to the general fund. Advocates worry California222s Medicaid program, Medi- Cal, may have longer lines and workers may have dramatically larger caseloads as a result of the cuts ( San Francisco Chronicle, 2/20 ; Kaiser Daily Health Policy Report, 2/20 ). Colorado State Senate Preliminarily Approves Eliminating Unused Prescription Drug Program : The Colorado state Senate gave preliminary approval to eliminate the Colorado Cares Rx Program which was crated in 2007 to provide low - income residents with affordable prescription drugs. Supporters of the program es timated that it would help 250,000 residents; however, many of the drugs offered through the program were available for lower prices at chain pharmacies and only 40 people enrolled in the program. Eliminating the program will save Colorado $3.9 million an nually ( Kaiser Daily Health Policy Report, 2/26 ). Connecticut Connecticut Insurers Propose Mandated Health Coverage and a Subsidized Insurance Pool for Low - Income Reside nts : Insurers in Connecticut have proposed a plan which would require state residents to obtain health insurance and provide coverage for residents not able to purchase private coverage. The state coverage would come through an insurance pool comprised of SAMHSA222 s Weekly Financing News Pulse February 27, 2009 2/27/09 8 multiple plans from multiple companies. Details of the plan, including premiums, copayments, benefits, and the details of the government subsidies, have not yet been discussed ( Kaiser Daily Health Policy Report, 2/23 ; Hartford Courant, 2/20 ). Delaware Delaware to Receive $320 Million in Medicaid Stimulus Funding : Estimates indicate that Delaware will receive roughly $800 million in total federal assistance through the stimulus package including $320 million for the state222s Medicaid program, the single largest state expense. Lawmakers say the additional federal Medicaid money will allow them to shift state funds to the general fund and close a $56 million current - year budget gap ( AP via MSNBC, 2/18 ). Governor Considers Cutting State Employee Benefits : Governor Jack Markell (D) is considering reducing benefits for Delaware222s 30,000 state employees. State employees pay an average of $54 monthly for their health insurance and receive health insurance as part of their retirement package. Health care for state employees and retirees will cost Delaware $411 million this year and combined state - employee benefits cost the state $1.56 billion or 46 percent of the general fund ( News Journal, 2/22 ). Sussex County makes Employee Health Care Optional : To save an estimated $120,000 annually, Sussex County will make health insurance optional for its employees. The county is targeting eight employees who receive health insurance through retirement packages from other employers. Under the new plan, employees will pay $1 dollar for health insurance ( News Journal, 2/23 ). Florida Governor Outlines Budget, Relies on Stimulus, Expands Health Care : Governor Charlie Crist (R) proposed his $66.5 billion fiscal-year 2010 budget last Friday, relying on $4.7 billion in anticipated federal stimulus funds. Among his proposals, the Governor allocates $294 million for the Medicaid Aged and Disabled Program, $470 million for the Medicaid Medically Needy Program, and $52 million for increased enrollment in KidCare, the State222s Children222s Health Insurance Program ( Orlando Busin ess Journal, 2/23 ). County Health Departments to Lose Money from Medicaid Reform Experiment, One Seeks to End Participation: Health departments in five Florida counties participating in an HMO - style Medicaid reform pilot stand to lose $8 million annually because of a shift in payment calculations, according to a report by the Florida Public Health Institute. The payment changes, which will take effect in September, will switch from paying the departments based on actual costs to paying much lower HMO rates . Broward County commissioners are seeking to end their participation in the Medicaid pilot program which has been considered a failure by many in the state (Financing News Pulse 1/30 edition) ( South Florida Sun - Sentinel, 2/25 ; Kaiser Daily Health Policy Report, 2/26 ). Idaho Idaho to Use Medicaid Funds to Fill Budget Shortfalls: The stimulus package raises the federal government222s share of Idaho222s Medicaid program from 70 percent to 79 percent which will yield $52.3 million this fiscal year and $73.2 million in the next fiscal year. Idaho plans to maintain SAMHSA222 s Weekly Financing News Pulse February 27, 2009 2/27/09 9 cuts to its Medicaid program which have already cleared the 2009 Legislature and the cuts expected to result from a bill currently in the Idaho Senate. Idaho plans to use the money made available through the increased federal Medicaid payments to ease other planned budget cuts, like the planned personnel cuts ( AP via MSNBC, 2/26 ). Update: House Committee Rejects Alcohol Tax Increase: A proposal, covered in last week222s Financing News Pulse (2/20 edition), which outlined proposed tax increases on beer and wine was rejected by the House Revenue and Taxation Committee this week after gathering only 5 supporters. The proposal was designed to raise $14 million for substance abuse treatment and an additional $5 millio n for the state222s general fund ( AP via Forbes, 2/25 ). Indiana House Passes One Year Budget, Awaits Major Rewrite in Senate : The Democratic- controlled Indiana House passed a $14.5 bil lion budget on straight party lines last week, relying on $540 million in federal Medicaid assistance from the stimulus bill. The Republican - controlled Senate is expected to make significant changes on which the two Houses must reach a compromise by April 29 ( Indy Star, 2/20 ). Iowa Pottawattamie County Likely to Raise Mental Health Levy : The Pottawattamie County Board of Supervisors is considering a request by the Community Services D irector to raise the state222s mental health levy form 80 percent to 100 percent of the maximum level allowed by the state. The current levy raises $3,502,180 and the tax increase is projected to bring in a nearly $900,000 more, for a total of $4,384,867 an nually. The request comes after the state cut community service funding by 1.5 percent this fiscal year and plans to cut another 6.5 percent in the coming fiscal year ( Nonpareil, 2/24 ). Wapello County Likely to Raise Mental Health Levy: The Wapello County Board of Supervisors will review the mental health strategic plan and the county222s 2010 budget on March, 10. The new mental health plan prop oses raising the county mental health levy to 100 percent of the level allowed by the state largely as a result of reduced state mental health funding. Mental health spending is the single largest county expense ( Ottumwa Courier, 2/24 ). Kansas Kansas House Rejects Bill Allowing Small Employers to Help Employees Buy Individual Health Plans : By a 62-57 vote the Kansas House rejected a bill which would have allowed small businesses which do not offer employer- sponsored health insurance to provide premium assistance to employees who purchase individual health coverage. Insurance officials were concerned that the bill would undermine the small - group health insurance market ( Kaiser Daily Health Policy Report, 2/25 ). Kentucky Kentucky Receives $205 Million for Medicaid: Slated to receive about $1 billion in federal Medicaid assistance through the stimulus package , Kentucky has gained access to $205 million as a result of the most recent round of Medicaid funding released by President Obama this SAMHSA222 s Weekly Financing News Pulse February 27, 2009 2/27/09 10 week. Kentucky Medicaid officials are hopeful that the additional federal funding will ease the state222s $232 million Medicaid shortfall ( Courier- Journal, 2/24 ). Louisiana LSU to Open Behavioral Health Center : As the last piece of a 10 - point plan to develop a system - wide approach to crisis care, a regional behavioral health crisis center is slated to open at LSU222s Earl K. Long Medical Center by the end of May. The center, funded with $1.43 million in federal assistance for Hurricane Katrina, will have 24 adult - only beds and be open 24 - hours -a- day everyday. LSU will operate the facility which, it says, will function as an extension of the emergency room despite being physically detached ( Advocate, 2/25 ) Maryland Updat e: Senators Call for Justification of Hospital222s Tax Exempt Status, Threaten Legislative Action : Senate Finance Committee Ranking Member Chuck Grassley (R - IA) is considering introducing legislation which would require Maryland hospitals, which currently en joy tax - exempt status as charity care hospitals, to adhere to federal standards to maintain their tax - exempt status. A report detailed in last week222s Financing News Pulse (2/20 edition) recommended that Maryland adopt provisions to ensure that its hospita ls meet charity care requirements and reform their financial assistance practices. Senator Grassley proposal would mandate that charity care hospitals spend 5 percent of annual revenue to charity care. Currently, Maryland222s non - profit hospitals spend 2 p ercent of revenue on charity care ( Baltimore Sun, 2/23 ; Kaiser Daily Heal th Policy Report, 2/23 ). Maryland Receives $276 Million in Medicaid Funding This Week: As part of the funds that President Obama released from the stimulus package this week, Maryland will receive $276 million for its Medicaid program. Health care advoc ates, including the Maryland Hospital Association, are advocating for using the funds to expand Medicaid for childless adults earning less than $11,000 annually. Governor Martin O222Malley222s (D) budget does not currently include the proposed expansion ( Baltimore Business Journal, 2/24 ). Massachusetts Economic Conditions Test State Health Mandate : Massachusetts222 law mandating that all residents obtain health insurance coverage and providing free insurance to the state222s poorest residents, subsidized insurance for residents making up to 300 percent of the federal poverty level , and nearly 100 percent payment of health premiums for laid - off residents collecting unemployment i s being tested by the current economic downturn. Since 2006, the state222s unemployment rate has climbed from 4.8 percent to nearly 7 percent and Governor Deval Patrick (D) has increased the health care budget from $820 million designed to cover 164,000 res idents to $880 million to cover more than 180,000 residents. The Governor and legislative leaders say Massachusetts will ensure the continuity of the law; however, some lawmakers feel it should be reexamined given the economic circumstances ( AP via Seattle Times, 2/23 ; Kaiser Daily Health Policy Report, 2/ 24 ). Massachusetts Hospitals Sue the U . S. Department of Health and Human Services Over Medicare Reimbursement : Cape Cod and Falmouth Hospitals are the lead plaintiffs in a case SAMHSA222 s Weekly Financing News Pulse February 27, 2009 2/27/09 11 arguing that, through an improperly applied reimbursement formula, HHS has provided lower- than - earned Medicare reimbursement payments for several years ( Barnstable Patriot, 2/20 ). Non- Profit eHealth Group to F orm For - Profit Subsidiary to Help Companies Adopt Health IT : The Massachusetts eHealth Collaborative, which played an important role in implementing the state222s electronic health record system, is creating a for- profit branch which will help health care compan ies and providers adopt electronic health records ( Kaiser Daily Health Policy Report, 2/20 ). Michigan Michigan Receives $464 Million in Immediate Medicaid Funding : Michigan received $464 million in Medicaid funding this week as part of the $15 billion in stimulus that President Obama released Wednesday. The stimulus legislation temporarily increases the federal share of Michigan222s Medicaid program to nearly 70 perce nt. In the past four months, Michigan has added over 50,000 low - income residents to the Medicaid program. ( Detroit Free Press, 2/23 ; AP via Chicago Tribune, 2/25 ). Governor Proposes Raising 223Other Tobacco224 Tax : Governor Jennifer Granholm (D) proposes raising Michigan222s tobacco tax on non - manufact ured cigarettes. The tax, which would affect all tobacco products except manufactured cigarettes, including chewing tobacco, snuff, and loose tobacco, would increase from 32 percent of the wholesale price to 64 percent of the wholesale price. Officials estimate the tax would generate $90 million annually ( Detroit Free Press, 2/23 ). Minnesota Successful Mental Health Program in Jeopardy: A program funded by St. Joseph222s, Regions, and United Hospitals as well as Bigelow and St. Paul Foundations, helped over 300 mentally ill individuals pay copayments to stay on medications last year and resulted in a 25 percent reduction in hospital stays; ho wever, the program does not have sufficient funding to continue. Last year the program cost $147,000 ( Minnesota Public Radio, 2/24 ). Mississippi Missis sippi Receives $137 Million for Medicaid : As part of the first round of stimulus funds, Mississippi received $137 million for the state222s Medicaid program which state Medicaid officials hope will be used to erase the state222s $90 million Medicaid shortfall. Mississippi was initially told its first round of funding would be delayed because the state222s Medicaid program did not meet eligibility criteria; however, after discussions with CMS, state officials say that assessment was made in error ( Mississippi Clarion - Ledger, 2/24 ) Missouri Update: Planned Expansion of Children222s Health Care Rejected by House Republicans : Governor Jay Nixon (D) had proposed expanding Missouri222s SCHIP and capping monthly premiums in his budget proposal for the current fiscal year; however, House Republicans removed it from the budget bill and successfully fought Democrats222 efforts to reintroduce it in the House. The proposal would have cost the state $939,000 for the remainder of the fiscal year ( Kansas City Star, 2/25 ). SAMHSA222 s Weekly Financing News Pulse February 27, 2009 2/27/09 12 Legislature Considers Bill to Mandate Autism Treatment Coverage: The House Health Care Policy Committee considered a bill (HB 79) this week which would require insurance providers to cover all autism - related treatment for children. The bill would cost the state an estimated $5 million to implement ( Springfield News - Leader, 2/25 ). Advocates Urge Governor to Re - Expand Medicaid: In 2005 former Governor Matt Blunt cut Medicaid eligibility and advocates are now asking Governor Jay Nixon (D) to re - expand the state222s Medicaid coverage. Governor Nixon had planned the expansion in his budget proposal last year but abandoned it due to falling state revenues. Instead, the Governor limited his planned Medicaid expansion to children and parents. Advocates hope that the influx of federal stimulus money for Medicaid will allow the Legislature to restore Medicaid eligibility to its pre - 2005 levels ( Jefferson City Post Dispatch via St. Louis Today, 2/26 ). University of Missouri May Take Over Mid-Missouri Mental Health Center : As proposed in Governor Jay Nixon222s (D) budget, MU HealthCare has taken initial steps to assume operation of the Mid - Misso uri Mental Health Center. The move would lay - off the 190 state employees of the center but would allow the center to qualify for higher Medicaid reimbursement rates as a university - run facility. The Governor222s budget proposal cut 295 positions from the D epartment of Mental Health including all 190 employees of the Center. University officials say current employees would need to reapply for their jobs but an arrangement will be made to ensure streamlined care for patients in the center222s 69 available beds ( Columbia Daily Tribune, 2/24 ). Nebraska Lawmakers to Debate Changes to the Safe - Haven Law : Nebraska222s safe - haven law, designed to prevent pa rents from abandoning their babies, is likely to receive considerable attention in the Nebraska Legislature as mental health advocates and lawmakers propose a bill (LB 356) which would expand the law to allow parents to request behavioral health care for their children from any of six behavioral health regions in Nebraska. Opponents of the bill, including Governor Dave Heineman (R), believe the bill is ambiguously worded and may cost as much as $160 million annually. The bill222s supporters argue the state cost estimates are inaccurate ( AP via Hays Daily News, 2/25 ; FOX, 2/25 ). Nevada Legislators Consider Reducing Nevada Employee222s Health Benefits : As part of the discussion surrounding the state222s $2.3 billion budget shortfall, Republican lawmakers have said they will not approve Democratic tax increases until there have been significant reductions in state employee benefits. The Las Vegas Chamber of Commerce suggested instituting a minimum retirement age, ending retirement health benefits for new employees, and opening the collective bargaining process to the public ( Reno Gazette-Journal, 2/26 ). New Jersey $362 Million in Medicaid Money Available this Week : New Jersey gained access to $362 million of the $2 billion in federal Medicaid funding it expects from the stimulus package. Gove rnor Jon Corzine (D) has counted on $850 million in federal funds to help balance the state222s current - year budget ( Courier- Post, 2/23 ; Philadelphia Inquirer, 2/24 ). SAMHSA222 s Weekly Financing News Pulse February 27, 2009 2/27/09 13 Recession Hurts State222s Hospitals : A survey of New Jersey222s hospitals, conducted by the New Jersey Hospital Administration, shows that the economic conditions have reduced the number of elective procedures, increased the demand for charity care, and reduced hospital profit margins. The survey indicates that 45 percent of hospitals reported laying off more than six employees in 2008 and 21 percent expect to layoff at least 10 employees this year ( Kaiser Daily Health Policy Report, 2/20 ). New Mexico House Panel Approves Budget Relying on Stimulus Funds: New Mexico222s Hou se Appropriations and Finance Committee approved the state222s budget for fiscal year 2010 which uses $166 million in federal funds to pay for the state222s Medicaid program. The budget is 6.4 percent less than the current - year budget after the cutbacks lawmakers have already made this year and 9 percent below the original fiscal year 2009 budget. The budget bill will likely be considered by the full House by Friday ( AP via Forbes, 2/24 ). New York More Than One - Third of Eligible New Yorkers Lose Medicaid Coverage Because of Paperwork : A study by the New York State Health Foundation found that paperwork and the annual recertification process were among the reasons that more than one- third of residents enrolled in New York222s public health insurance programs lost their coverage despite remaining eligible. The study covered New York222s Medicaid program, Family Health Plus, and Child Health Plus programs ( Kaiser Daily Health Policy Report, 2/26 ). The study is available at the Foundation222s website . New York222s Medicaid Program Spends More on Long - Term Care than Comparable States, Doesn222t Get More: According to a study released by the Rockefeller Institute of Government and funded by the New York State Health Foundation, New York222s Medicaid program spe nds more on long - term care than other comparable state programs but delivers only average or slightly above average quality of care. The study analyzed nursing home care, mental health care, and home and personal care. New York222s Medicaid program cost nearly $45 billion in 2006, more than $10 billion more than any other state ( Kaiser Daily Health Policy Report, 2/24 ; AP via USA Today, 2/20 ; Kaiser Daily Health Policy Report, 2/26 ). The report is available on the Rockefeller Instit ute222s website . Monroe County Takes Action to Correct $3.3 Million in Medicaid Pharmacy Overpayments : Monroe County discovered that Saratoga Pharmacy received $3.3 million in unjustified payments as a result of poorly documented prescription deliveries and improper claims handling. The pharmacy is not guilty of fraud nor were its actions illegal; however, faulty paperwork resulted in overpayment. The county has already recovered two - thirds of the amount owed by withholding payments but may need to begin the formal collections process because the pharmacy may no longer participate in Medicaid. The recovered money is split between the county, state, and federal go vernments. An additional 30 pharmacies in the county are currently under investigation ( WXXI, 2/23 ; ABC WHAM, 2/23 ; MSNBC, 2/24 ). SAMHSA222 s Weekly Financing News Pulse February 27, 2009 2/27/09 14 North Carolina North Carolina to Get $439 Million in Medicaid Payments : Though it was widely reported that North Carolina was among the states which would receive delayed Medicaid payments as a result of stricter - than - acceptable Medicaid eligibility requirements, North Carolina contacted CMS this week to settle the matter which stemmed from a technical error made in 1995. North Carolina officials report that the problem was corrected and the state222s payments are not delayed ( Fayetteville Observer, 2/26 ). State Rejects Appeal, Solidifies Medicaid Billing Contract : The state222s Department of Health and Human Services rejected an appeal by Electronic Data Systems (EDS) on Friday in a case over the state222s Medicaid billing systems contract. EDS had run the state222s Medicaid billing system for nearly 30 years but the state elected to contract with Computer Science for its Medicaid billing system, largely because their bid for the contract was $22 million less than EDS222. The complete appeals process is anticipate d to take months or years ( WRAL, 2/20 ). Private Mental Health Treatment Facility Seeks to Expand, Take Slots from Public Hospitals : Old Vineyard Behavioral Health Services, currently operating a 111 - bed mental health treatment facility, has applied with CenterPoint Human Services to the Division of Health Service Regulation to open a two - story 24 - hour psychiatric - emergency department and transfer 50 beds from Broughton Hospital to the new site. The total cost of the expansion is estimated at $14 million. Critics, including numerous mental health advocates, worry that the 50 beds will be less useful at the Old Vineyard facility because it cannot accept Medicaid payments; however, supporters of the plan say that the 50 beds will free up other slots at Medicaid - participating locations ( Winston - Salem Journal, 2/21 ). State Mental Hospital to Continue Receiving CMS Funding : The state- run Central Regional hospital, under investigation by CMS for dangerous conditions, passed a three - day inspection and will continue to receive the $1.2 million in Medicare and Medicaid funds which it receives monthly ( AP via News & Observer, 2/20 ). State Legislators Considering Bill to Raise Health Insurance Rates for Obese, Smokers : In an effort to keep the state222s health plan solvent, state lawmakers are consider ing a bill which forces state employees who smoke or are 35 percent heavier than the state222s definition of 223fit224 into health plans with higher copayments and deductibles. The average additional cost for those affected would be $2000 to $2360 annually. The state222s program covers 660,000 employees and dependents ( Charlotte Observer, 2/19 ). Local Behavioral Health Management Agency Seeks Operator: To comply with the North Carolina Departm ent of Health and Human Services, Local Management Entities will be seeking new private contractors to operate behavioral health treatment clinics. Sandhills Center for Mental Health in Rockingham, which runs nine county outpatient mental health clinics, has begun searching for a new contractor. Sandhills and other Local Management Entities will continue to monitor, fund and manage public behavioral health services in their areas ( Richmond County Daily Journal, 2/20 ). SAMHSA222s Weekly Financing News Pulse February 27, 2009 2/27/09 15 Ohio Mahoning County Mental Health Officials Hope Stimulus will Compensate for Budget Cuts: The Mahoning County Board of Mental Health cut $448,755 from the current - year budget ending June 30, 2009. Local mental health advocates say that $100 million of Ohio222s federal stimulus money will be devote d to mental health treatment; however, some worry that all of that funding may go to hospitals rather than community - based mental health treatment ( Vindy, 2/20 ). Oklahoma House Panel Passes Health Care Bills : Oklahoma222s House Economic Development and Financial Services Committee approved health legislation Tuesday which is designed to create affordable private insurance policies to reduce the number of uninsured residents and Medicaid recipients in Oklahoma. The proposal would authorize low - cost mandate - free accident and catastrophic insurance plans ( AP via MSNBC, 2/25 ). Pennsylvania Witho ut County Funding, York Mental Health Center Turns Away Clients: York - Adams Mental Health/Mental Retardation operates an acute- care center in North York; however, they have not received county payments which normally cover patients without private insuranc e who do not qualify for federal assistance. The agency has already spent the $300,000 it had allocated to treat unfunded patients and is now referring patients to the state hospital. York - Adams Mental Health/Mental Retardation222s budget has already been cut and Governor Ed Rendell222s (D) budget proposes cutting the agency222s funding by an additional two percent ( York Daily Record, 2/21 ). Rhode Island Rhode Island Receives First Round of Stimulus Funds : As p art of the $15 billion in stimulus funds President Obama released this week, Rhode Island will receive $93.5 million in Medicaid funds. State lawmakers are debating how to use the money which comes with no restrictions. Governor Donald Carcieri (R) wants to use the funds to cut taxes while members of the Legislature want to use the funds to close the state222s budget gap ( Providence Journal, 2/24 ; AP via Forbes, 2/26 ). South Carolina South Carolina222s First Round Medicaid Funding Delayed: Though slated to receive $173 million in Medicaid funds as part of the $15 billion President Obama released from the stimulus this week, South Carolina does not currently meet the eligibility rules required to receive the federal Medicaid funding. South Carolina222s Department of Health and Human Services is working with CMS to craft a 223letter of intent224 to restore eligibility to mandated July 2008 levels by April 2009. South Carolina must restore its practice of granting two years of aid for 223transitional assistance224 for individuals whose income increases put them above the state222s maximum income level s and waive cost - of - living increases in Social Security benefits when considering Medicaid eligibility income ( AP via Miami Herald, 2/24 ; Greenville Online, 2/25 ; Charleston Business Journal, 2/2 5 ). Hospital S ays State Budget H ave Forced Admission of Non- Approved Patients : Spartanburg Regional Medical Center is not certified to handle involuntary psychiatric patients but has been SAMHSA222 s Weekly Financing News Pulse February 27, 2009 2/27/09 16 admitting them since the state cut $26 million from the Department of Mental Health budget a few months ago. The Spartanburg hospital plans to reexamine its patient admission criteria which are not currently being enforced. State - run facilities have had waiting lists for psychiatric beds since 2001 ( Spartanburg Herald - Journal, 2/22 ). Texas Montgomery County Seeks to Use Federal Housing Funds for Substance Abuse Center : Montgomery County Community Development received permission from county comm issioners to apply for $1.6 million in Neighborhood Stabilization Program funding, part of a U.S. Department of Housing and Urban Development allotment from last summer. Community Development seeks to use $1 million of the funds to create an adult substance abuse treatment center which, if funded, would house 40 adults ( Conroe Courier, 2/24 ). Utah Update: Two Health Reform Bills Pass Utah House : The Utah House ap proved two health care bills aimed at improving health care in the state. HB 165 increases the use of health IT and streamlines medical billing. HB 188, addressed in last week222s Financing News Pulse (2/20 edition), establishes plans called NetCare which would be offered to small employers, individuals, and laid - off employees. The NetCare plans would be exempt from the state222s mandatory coverage requirements and have higher - than - average deductibles ( Kaiser Daily Health Policy Report, 2/23 ; Desert News, 2/19 ). Legislatures Introduce Bills to Lift Restrictions on Health Insurance for Immigrant Children: Similar bills proposed in the Utah Legislature (HB 171 and SB 225) would eliminate the current five - year waiting period for immigrant children to become eligible for SCHIP and Medicaid. Early estimates indicate that change would cost Utah $400,000 and c over 800 to 1,300 children ( Kaiser Daily Health Policy Report, 2/26 ). Advocates Say Mental Health Cuts Will Significantly Hurt Mental Health Treatment: The proposed state budget, currently before the budget committee in the Legislature, cuts $3.5 million from mental health services as part of an effort to close the state222s $1.5 billion budget shortfall. However, advocates worry that the cuts will translate to a $14 million reduction for mental health services as a result of $10.5 million in lost federal Medicaid matching funds ( Desert News, 2/24 ; AP via Local News 8, 2/20 ; Salt Lake Tribune, 2/19 ). Vermont Advocates Warn that State Cuts May Make Substance Abuse Treatment More Costly: Governor Jim Douglas222 (R) budget proposes a four percent cut in payments to non - profit human service agencies that contract with the state. Substance abuse treatment experts and some lawmakers are concerned that such cuts will shift clients from relatively low - cost free - standing treatme nt facilities to more costly hospital- based treatment ( AP via NBC, 2/25 ). Virginia Update: Virginia222s House and Senate Reach Agreement on Mental Health Cuts: The Virginia Legislature agreed Thursday to restore the 200 mental retardation waivers which Governor Tim Kaine (D) had proposed cutting from the state222s budget . The Legislature also added an SAMHSA222 s Weekly Financing News Pulse February 27, 2009 2/27/09 17 additional 200 waivers, which fund community - based mental health treatment, to help serve the nearly 2,000 residents currently awaiting waivers . The House and Senate also agreed to restore $12 million in Medicaid cuts to nursing homes and state hospitals which the Governor proposed in December. The Governors cuts were covered previously in the Financing News Pulse ( 2/13, 1/23, and 1/16 editions) ( AP via MSNBC, 2/26 ; Lynchburg News & Advance, 2/26 ). West Virginia West Virginia Receives Medicaid Funding, Anticipates More : Senator Jay Rockefeller (D - WV) announced the West Virginia received its share of the $15 billion in Medicaid funding that President Obama releas ed this week. The federal government already paid 73.7 percent of the state222s Medicaid costs and the stimulus package temporarily increases the federal government222s share to 79.9 percent. West Virginia expects to receive $450 million in federal Medicaid funding over the next two years ( Williamson Daily News, 2/25 ). Wisconsin State Senate Removes Health Care Overhaul From Budget: State senators have removed a plan which would have guaranteed health care for all Wisconsin residents at a c ost of $15 billion to the state. Governor Jim Doyle (D) also dropped a plan from his proposed budget which would have helped small businesses provide employer - sponsored health care and cost the state roughly $100 million. Lawmakers say that only smaller health care changes will be included in the budget currently moving through the Legislature ( Wisconsin State Journal, 2/20 ). Governor222s Budget May Lead to Unions for Home Health Care Workers : Gov ernor Jim Doyle222s (D) budget contains a provision which some say may pave the way for unionizing Wisconsin222s home health care workers. The plan would group the workers into a registry and, if the workers choose, a union. The registry is designed to make it easer for both workers and consumers to find each other; however, some worry that unionizing the care providers may raise the price of care, which is largely financed through Medicaid ( Wisconsin State Journal, 2/24 ). Baxter Healthcare Settles Medicaid Fraud Charges: Baxter Healthcare Corp. paid Wisconsin $1.05 million to settle charges that it defrauded the state222s Medicaid program. Baxter is one of 36 programs charged by the Office of the Attorney General with defrauding the Wisconsin Medicaid program through deceptive pharmaceutical reimbursements. The Financing News Pulse (2/20 edition) covered Pharmica222s $9 million payment to the state. Amgen Inc. and Immunex Corp. settled with the state i n December, paying Wisconsin $2 million ( Business Journal of Milwaukee, 2/24 ).
