WeeklyFinancingNewsPulsefinal20090130.pdf (PDF | 339.23 kb)
SAM HSA222s Weekly Financing News Pulse January 30th 2009 1/30/09 1 SAMHSA222s Weekly Financing News Pulse 1/30/09 : Covering 1/23 - 1/ 29 Table of Contents National Health Financing News HR 1, A merican Recovery and Reinvestment Act (Stimulus Bill) Passes the House HR 2, C hildren222s Health Insurance Progra m Passes the Senate Health Care Reform Possibly Delayed Until 2010 Report: At Least 25 States to Cut Medica id Funding COBRA Unpopular Among Laid - Off Workers Department of Veterans Affairs Plan for Rehabilitation is Flawed WellPoint Reports Lower Earnings K aiser Family Foundation Offers New State -L evel Health Care Analysis Around the States: State and Local Behavioral Health Financing News Alabama Arizon a California Colorado Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Louisiana Maine Maryland Massachusetts Minnesota Mississippi Missouri Nevada New Hampshire New Mexico New York Ohio Pennsylvania Tennessee Texas Utah Vermont Washington Wisconsin For questions or comments, please contact Sarah Wattenberg (sarah.wattenberg@samhsa.hhs.gov). National Health Fina ncing News HR 1, American Recovery and Reinvestment Act (Stimulus Bill) Passes t he House: On Wednesday , the United States House of Representatives passed the $815 billion stimulus bill with a 244 - 188 vote which fell nearly perfectly down party lines. Every House Republican voted against the bill and only 11 Democrats opposed it ( Washington Post, 1/29 ) . The package , among the largest in history, allocates $153.2 billion in new federal health care funds ( USA Today, 1/29 ) including funding for Medicaid, health information t echnology, assistance to the unemployed, preventive care, community health care, and the fights against avian flu, STDs , and TB ( Kaiser Daily Health Policy Report, 1/29 ). Spending breakdowns are SAM HSA222s Weekly Financing News Pulse January 30th 2009 1/30/09 2 available via th e Associated Press . The version of the bill currently in the Senate now exceeds President Obama222s $850 billion cap 227 coming in at $888 billion ( USA Today, 1/29 ). The Senate bill, S 1, was marked up by the Finance Committee on Tuesday and head s to the senate floor next week (CQ, Committee Coverage, 1/27; CQ Today, 1/29). o Medicaid: Democrats in the House and Senate are split over how best to divide the $87 billion allotted to state Medicaid programs. Senate Democrats favor a formula which would disproportionately benefit less populous states ( New York Times, 1/29 ). The Center on Budget and Policy Priorities posted a preliminary state - by - state analysis of stimulus - related Medicaid funding earlier this week; however, the Center is updating t he report and will repost it shortly on their website . o Health Insurance for the Unemployed: The House stimulus bill includes $40 billion to provide health care coverage for the uninsured via COBRA and Medicaid. The funding provides Medicaid coverage through 2010 to workers who lose jobs which did not provide health insurance. The bill also allocates funds to pay up to 65 percent of COBRA premiums for one year and allows workers over 55 227 or workers with over 10 years experience with their employer 227 to keep COBRA until they find a new job or qualify for Medicare ( Wall Street Journal, 1/29 ; Top News, 1/23 ). o Report: Funding for States Would Close Less Than Half of Projected Deficits : The Center on Budget and Policy Priorities released a report concluding that the House version of the recovery package cover s on ly 45 percent of the projected state budget deficits of $350 billion . The report explains that, despite the total value of the bill, approximately $150- $155 billion will go to currently existing state programs. The Report is available via the Center222s website . HR 2, Children222s Health Insurance Program Passes the Senate : The senate passed legislation on Thursday authorizing the State Children222s Health Insurance Program (SCHIP) for four - and -a- half years and expanding the program by $32.8 billion to cover an additional four million children. The bill offsets the cost of the expansion by raising taxes on tobacco products. The legislation also removes a waiting period previously applied to new legal immigrants seeking SCHIP coverage and caps program eligibility at three times the federal poverty level. The bill has been sent to the House where House Majority Leader Steny Hoyer (D - MD) says a conference with the Senate is not required because the Senate and House versions of the bill are nearly identical. The house will clear the bill quickly and send it to President Obama (CQ Today, 1/29; CQ Floor Votes, 1/29). Health Care Reform Possibly Delayed Until 2010 : House Majority Le ader Steny Hoyer (D - MD) promis es to address comprehensive health care overhaul 227 a package which would reform Medicare, Medicaid, and Social Security simultaneously 227 during the 111th Congress. Hoyer and other lawmakers now estimate that, though it will still occur during this Congress, health care SAM HSA222s Weekly Financing News Pulse January 30th 2009 1/30/09 3 reform may have to wait until the next calendar year while they deal with immediate issues related to the worsening economy. Rep. Henry Waxman (D - CA), however, still believes that health care reform is possible in 2009 (CQ Today, 1/29 ; The Hill, 1/29 ). Report: At Least 25 States to Cut Medicaid Funding : A report by Families USA indicate s that 25 states and the District of Columbia have already drafted plans to cut Medicaid funding and 12 states also have planned c ut s to SCHIP 227 the State Children222s Health Insurance Program. The report was released in January and does not consider the recent passage of the stimulus bill in the House ( UPI via the Wall Street Journal, 1/28 ; CQ Health Beat, 1/28). The original report is available at Families USA . COBRA Unpopular Among Laid-Off Workers : The Commonwealth Fund released an analysis showing that only 10 percent of laid - off workers elect to keep their employer - sponso red insurance through COBRA. Because individuals on COBRA are forced to pay the entire cost of their health insurance227 including any portion previously paid by their employer 227 health insurance for the recently unemployed is an average of 4 to 6 times more costly than it is was while they were working ( CNN, 1/23 ). Department of Veterans Affairs Plan for Rehabilitation is Flawed : A report by the Government Accountability Office (GAO) found that the VA222s budget and plan for rehabilitating veterans in nursing homes, hospices, and community centers are flawed. The report classifies the VA222s cost assumptions and workload projections as 223unrealistic224 ( AP, 1/23 ). WellPoint Reports Lower Earnings : The health insurance company WellPoint reported that fourth quarter earnings fell 61 percent and attributed the decreased profit to lower mem bership and investment losses. The company says that almost half of the 288,000 health plan members it lost in the fourth quarter lost their coverage due to layoffs ( AP via Boston Globe, 1/28 ; Kaiser Daily Health Policy Report, 1/29 ). Kaiser Family Foundation Publishes New State - Level Health Care Analysi s : Kaiser222s State Health Facts recently published a table with actual and projected Federal Matching Rates (FMAPs) by state from 2004 through 2010 and eligibility requirements for state Medicaid and SCHIP programs . Other state- level health care resources are available through Kaiser222s State Health Facts website. Around the States: State and Local Behavioral Health Financing News Alabama Alabama Medicaid Agency Takes Steps Towards Electronic Health Records : Alabama is among the first state s to receive federal grant money to initiate the Q - tool 227 a system of electronic health records. The state Medicaid agency will give 223mini- grants224 to physician222s offices to fund SAM HSA222s Weekly Financing News Pulse January 30th 2009 1/30/09 4 the necessary equipment and software procurement for the system ( NBC, 1/28 ; Birmingham News, 12/20/08 ). Arizona State Mental Health Contractor Investigated: Magellan Health Services, the contractor that man ages behavioral health care in Maricopa County, is currently under investigation for numerous violations including the deaths of two boys late last year. A court - ordered audit has called into question Magellan 222s ability to provide appropriate case managem ent, clinical treatment, or follow - up services to its mental health clients. Magellan won the three year $1.5 billion dollar contract from Maricopa county in 2007 ( Arizona Guardian, 1/25 ; Arizona Republic, 1/27 ). California Pro position 63: Effective and Under Attack: In 2004 , California voters passed Proposition 63 227 a measure imposing a one percent tax on income over $1 million and directing the revenue to mental health services. When the proposition passed it was projected to y ield $750 million annually; however, the tax brought in between $1.3 and $1.5 billion this year ( Ventura County Star, 1/26 ). Governor Arnold Schwarzenegger (R) proposes redirect ing money from Prop. 63 to the general fund and cut ting the mental health services that Prop. 63 was created to fund ( California Progress Report, 1/27 ). 51,050 Californians paid the Prop. 63 tax in 2006 but analysts report that that level of revenue generated by the tax will drop to $981 million this fiscal year and $887 next fiscal year as a result of a weakened economy . California 222s Legislature to Cut $6 Billion in State Spending: With a looming $400 billion budget deficit for the next year and a half, the California Legislature has endorsed $6 billion in spending cuts which will affect regional health centers. The proposal reduce s behavioral health funding by $107 million and does not resolve the future budget deficit facing the state ( AHN, 1/26 ). Santa Cruz and Sacramento Counties Face Budget Cuts, Health Care Affected: F acing a $25 million budget shortfall, Santa Cruz County plans a 20 percent spending reduction over the next year and a half. The spending cuts will include 250 layoffs and will likely affect the county222s health and social services ( Santa Cruz Sentinel, 1/24 ). Similarly, Sacramento County is facing a $42.3 million mid - year shortfall which the county will rectify through cuts and layoffs slated to focus on the Department of Health and Human Services. The cuts will affect public health clinics, in - home support services, and mental health programs ( Sacramento Bee, 1/23 ). Update: L.A. County to Lose $1.4 Billion Under Payment Deferment Plan : In a payment deferment plan reported previously in the Financing News Pulse (1/23 edition) , Governor Arnold Schwarzenegger (R) proposed defer ring payments to California counties until August to cope with the mounting state - wide budget cri sis. Los Angeles County now estimates that those deferrals will cost vastly more than the governor222s office projected and that, if continued as planned, they will have dramatic effects on the state222s least fortunate residents . L.A. County SAM HSA222s Weekly Financing News Pulse January 30th 2009 1/30/09 5 anticipates los ing $1.4 billion in the 7 months of planned deferrals. Counties use the deferred money to pay for welfare and social service programs ( Los Angeles Times, 1/ 27 ). Emergency Department Physicians Sue California over Low Medicaid Payments: A group of emergency department physicians are suing the California Department of Health Care Services for unspecified damages. They claim that physician reimbursements und er Medi - Cal, the state 222s Medicaid Program, are so low that the result is compromise d patient care. The suit alleges that emergency physicians provided $100 million in unpaid services in 2007 and that cost of care has sk yrocketed with no corresponding incr ease in the Medicaid reimbursement rate ( Los Angeles Times, 1/28 ; Kaiser Daily Health Policy Report, 1/29 ). Fewer Pediatric Beds In CA Hospitals: Between 1998 and 2007 California hospitals have eliminated 19 percent of their pediatric beds 227 more than 800 slots. As a result, pediatric services have been increasingly limited to the state222s eight regional children222s hospitals. The CEO of the California Children222s Hospital Association believes the situation is worsened by the state222s low Medicaid reimbursement rates for children222s health care ( Los Angeles Times, 1/25 ; Kaiser Daily Health Policy Report, 1/27 ). Colorado Colorado University Hospi tal Eliminates Psychiatric Beds: Joining many other Colorado hospitals, Colorado University Hospital has eliminated its psychiatric beds, leaving Denver with only 380 adult psychiatric inpatient slots. Colorado emergency rooms see 40,0 00 mentally ill people annually, roughly 40 percent of whom require hospitalization ( Denver Post, 1/25 ). School Clinic to Provide Services for Entire Community: The health clinic at Olathe Elementary in Montrose Co unty will provide health services 227 including mental health services 227 for the entire Montrose county community. Governor Bill Ritter (D) visited the Olathe Town Hall to praise the community for its innovative work. He warned that health care cuts are looming , looked forward to federal assistance , and highlighted the need for proactive communities like Montrose County . There are 800,000 uninsured individuals in Colorado ( Montrose Daily Press, 1/27 ). Florida Governor Passes Budget While Vetoing Portions, Health Care Affected: On Tuesday Governor Charlie Crist (R) approved a budget while vetoing some portions proposed by the Legislature. The governor rejected $13.75 million in cuts to developmental disability services, $6.8 million in cuts to mental health services, $3 million in substance abuse treatment cuts, as well as fund ing cuts for the deaf, blind, and autistic ( Daytona Beach News Journal, 1/28 ). Florida Anxiously Anticipating Stimulus Assistance: Based on estimates from before the passage of the House bill (see page 1 above) , Florida is projected t o receive $4.3 billion in federal assistance . The legislation would increase the federal government222s share of Florida222s SAM HSA222s Weekly Financing News Pulse January 30th 2009 1/30/09 6 Medicaid program from 55 percent to 68 percent. Because of Florida222s high unemployment rate , the state is slated to receive one of th e larger FMAP increases in the nation . Florida222s Medicaid program serves 2.3 million beneficiaries ( Herald Tribune, 1/23 ). Jeb Bush222s Medicaid Pilot Unpopular with Physicians and Patients : A Medicaid privatization pilot , created by Former Governor Jeb Bush (R) as a model for nation - wide Medicaid privatization , has lost 25 percent of its participating physicians. D octors say they are unable to treat patients app ropriately and patients complain of difficulties making appointments and obtaining medications ( AP via ABC, 1/29 ). Georgia Administration Proposes Privatization of Mental Hospitals, Legislators Opposed: Georgia222s Department of Human Resources proposed a plan which would hire for - profit firms to build and operate three mental hospitals to replace the seven currently existing state- run hospitals. The department says the c hange could save mo ney on car e but legislators question whether the plan would restrict access for southern Georgians. Legislators also call into question how the plan will interact with the recent U.S. Department of Justice ruling regarding the state222s m ental hospitals which the Financing News Pulse covered last week ( Atlanta Journal Constitution, 1/23 ). State Budget Cuts for Behavioral Health: In addition to the proposed privatization of mental hospitals, Governor Sonny Perdue222s (R) budget includes cutting $3.8 million in job assistance for individuals with behavioral health conditions and reducing state funding for six of Georgia222s 37 methadone cl inics. Officials note that federal funds will pay for individuals affected by the methadone clinic cut ( The Telegraph , 1/26 ). Update: Hospitals React to Governor222s Call to Impose Fees: Governor Sonny Perdue ( R) proposed a 1.6 percent fee for hospitals and insurers as part of an effort to raise $317 million to fund that state222s Medicaid program . Hospitals strongly oppose the fee, estimating that it will cost the hospital system between $8 and $ 9 million. A portion of the Medicaid shortfall owes to the expiration of Georgia222s exemption from a portion of the Deficit Reduction Act of 2005 (DRA) which allowed the state to tax its Medicaid Managed Care Organizations (MCOs) without taxing non- Medicaid MCOs ( Gainesville Times, 1/25 ). Hawaii Hawaii to Beg in Medicaid Managed- Care System, Replace Fee - for - Service: Beginning on February 1st, UnitedHealth Group Inc. and WellCare Health Plans Inc. will take over Hawaii222s Medicaid program, switching it from a fee - for - service system to managed care as part of a contract worth $1.5 billion. Many providers report that the companies are offering lower reimbursement rates which, in some cases, do not cover cost. Hawaii222s Medicaid program serves 39,000 beneficiaries throughout the islands. ( Star Bulletin, 1/23 ). SAM HSA222s Weekly Financing News Pulse January 30th 2009 1/30/09 7 Idaho Update: Idaho Health Cuts Close Clinic In Boise: As part of the state222s Department of Health and Welfare cuts reported previously in the Financing News Pulse (1/16 edition) , Idaho closed an 8 - bed mental health facility on January 16th. The facility, the Franklin House, handled over 600 admissions per year and had a budget of $325,000 annually. A replacement facility may open by January of 2010 ; however, current patients will likely receive treatment at hospital emergency rooms ( AP via ABC, 1/26 ; Idaho Statesman, 1/26 ). Illinois Update: State Blames Chicago for Closing Mental Health Centers : Last week the Financing News Pulse documente d the imminent closure of four of Chicago222s 12 outpatient mental hea lth centers and noted that Mayor Richard Daly (D) cited a $1.2 million reduction in state funds as the impetus for the closures. Illinois Department of Human Services officials are now blaming the city. Beginning in July , the state switched from health service grants to a per - service billing system and the city billed for only a portion of the money allotted. As a result, the state reduced the city222s budget by the amount not billed yielding a loss of $1.2 million for Chicago ( Chicago Tribune, 1/23 ). Indiana Debate Surrounding Indiana Medicaid Program222s Efficiency : State Representati ve Peggy Welch (D - Bloomington) has co - sponsored legislation calling on the Indiana Office of Medicaid Policy and Planning (OMPP) to review Medicaid payments from 2001 - 2007 for fraud and abuse. Welch claims the state must do more to see that the $1 billion Indiana spends to insure one million residents are spent honestly and wisely. The director of the OMPP says that the office already performs such oversight ( Indy Star, 1/25 ). Iowa Democratic Legislators Pledge to Expand Children222s Health Care Despite Governor222s Budget Cuts: Governor Chet Culver 222s (D) proposed budget cut s most state programs by 6.5 percent in an effort to close a $700 million shortfall. In spite of the economic crisis, Democratic legislators say they will insist on a $10 million expansion of children222s health care coverage. Despite spending $4.8 million to insure more children last year. R oughly 53,000 Iowa children lack health insurance ( AP via Chicago Tribune, 1/27 ). Kansas Update: Kansas Republicans Offer Counter Proposal for State222s Budget: In response to Governor Kathleen Sebelius222 (D) proposed budget cuts, state Republicans have proposed a 3.4 percent across - the - board cut. Detailed effects of the Republican plan for behavioral health services are not yet available; however, the governor222s plan would cut roughly $7 million from mental health centers ( Kansas City Stat, 1/13 ; Lawrence Journal World & News, 1/11 ). On Tuesday, the State222s Senate Ways and Means Committee approved a bill which merged some of SAM HSA222s Weekly Financing News Pulse January 30th 2009 1/30/09 8 the governor222s spending reductions and the Republican legislators222 3.4 percent cut (Topeka Capital- Journal, 1/27 ). Governor Forms Commission, Considers Closing Mental Health Facility: Governor Kathleen Sebelius (D) has formed the Facilities Clos ure and Realignment Commission to investigate closing certain state - run facilities. Facilities under consideration include a school for the deaf, a school for the blind, and a mental health facility ( Kansas City Kansan, 1/23 ; Kansas City Star, 1/23 ) . Louisiana Potential Health Cuts May Affect Medicaid: Governor Bobby Jindal222s (R) administration instructed state departments to begin crafting smaller budgets in preparation for the governor222s new budget proposal this March . To cope with the state222s $1.2 billion shortfall, the administration anticipates cutting as much as $412 million from health care. Officials from the Department of Health and Hospitals warn that cuts will reduce the federal Medicaid match and may translate to over $1 billion in losses for the department ( AP via Business Report, 1/26 ). Maine Emergency Supplemental Budget Passes with Health Care Cuts : On Tuesday January 27th the Maine Legislature passed a supplemental budget to address the projected $166 million revenue gap facing the state. Department of Health and Human Services funding was cut by nearly $40 million. Cuts in this supplemental budget do not address the projected $800 million shortfall for the 2010 fiscal year which begins in July ( ABC, 1/27 ). Maryland Governor O222Malley Postpones Budget Cuts, Waits on C ongress : Governor Martin O222Malley (D) postponed a round of budget cuts planned to take effect Wednesday. After discussions with congressmen , O222Malley said he was confident that Maryland will receive much more federal support than his initial budget estima ted. Governor O222Malley now reports that Maryland will receive roughly $3.5 billion in federal funds over two years ( Baltimore Sun, 1/27 ). Maryland May See $1.4 Billion in New Medicaid Funding: According to an analysis of the U.S. House222s stimulus legislation by the Center on Budget and Policy Priorities, the 4.9 percent increase in the Medicaid federal matching rate (FMAP) will raise Maryland222s matching rate to 54.9 percent and yield about $1.4 billion for the state222s Medicaid program. There is also a provision in the proposed legislation to allot more money to states with high er unemployment rates ; however, it is still unclear whether Maryland will qualify ( Southern Maryland Online, 1/23 ). Massachusetts Governor Proposes Budget, Cuts Health Care, and Relies on Stimulus: On Thursday, Governor Deval Patrick (D) proposed his budget which aims to close the $4.6 billion budget gap facing the SAM HSA222s Weekly Financing News Pulse January 30th 2009 1/30/09 9 state for the coming year and a half. The budget includes roughly $70 million in cuts to public health but will restore $105 million for safety net hospitals over two years. To support Medicaid, the gove rnor is relying heavily on $1.2 billion in anticipated federal Medicaid assistance ( WBUR NPR Boston, 1/29 ). Attorney General Investigates Blue Cross Blue Shield of MA and Partners HealthCa re: The Attorney General for Massachusetts began an investigation to determine if Blue Cross Blue Shield of Massachusetts and its largest health insurance provider, Partners HealthCare, illegally conspired to raise health care prices over the last nine years. Blue Cross has increased the rate it pays to Partners HealthCare by 75 percent 227 vastly more than it increased the rate for any other provider ( Boston Globe, 1/23 ; Kaiser Daily Health Policy Report, 1/26 ). Minnesota Lawmakers Begin to Believe State Budget Cuts Cannot Spare Medicaid: Governor Tim Pawlen ty (R) and legislators are beginning to think there is no way to solve the state222s projected $4.8 billion deficit without cutting Medicaid funding. Minnesota222s Medicaid Program 227 Medical Assistance227 is financed in part by $3 billion in state funds , which accounted for one fifth of the state222s budget this year. The state222s share of Medicaid is anticipated to rise by 12 percent each year in 2010 and 2011 . T he problem would be exacerbated by the loss of federal matching funds associated with cuts to state Medi caid funding ( Minneapolis S tar Tribune, 1/26 ; Min neapolis Star Tribune. 1/27 ) . Health Care Cuts to Affect Nearly 100,000 Residents : Governor Tim Pawlenty222s (R) proposed budget cuts would limit eligibility for General Assistance Medical Care 227 the state222s program for low - income adults who do not qualify for federal assistance. The proposal would restrict eligibility for 55,000 adults without children and 29,000 parents. The governor222s budget for 2010- 2011 is 2.2 percent less than the 2008 - 2009 budget ( KARE via MSNBC, 1/28 ) . Attorney General Alleges Allina Used Illegal Financing Rates on Medical Bills : Allina Hospitals and Clinics charged patients 18 percent interest on debt below $5 , 000 and 12 percent interest on debt from $5 , 000 - $9 , 999. The attor ney general alleges that the interest rates exceed those permitted by state law but Allina argues that they are permissible under an 223open - ended credit224 clause ( Minneapolis Star Tribune, 1/22 ; Kaiser Daily Health Policy Report, 1/26 ). Mississippi Mississippi222s House to Hold Hearings on Department of Mental Health, Waste Alleged: In response to a report last summer by the state222s Performance Evaluation and Expenditure Review (PEER), a state representative is holding hearings with the state222s Director of the Department of Mental Health. The same representative also proposes modifying certain hiring rules for the Department to f ocus on scientific qualifications and divert ing money currently spent housing personnel 227 which may total $2 million 227 back to patient care. The PEER report SAM HSA222s Weekly Financing News Pulse January 30th 2009 1/30/09 10 found that Mississippi spends 152 percent more per capita on mental health than any other Southern state ( Daily Leader, 1/23 ; Hattiesburg American, 1/26 ). Legislature Hears Ways to Pay for Medicaid: In the face of a budget shortfall and increase d Medicaid enrolment , the state Legislature has considered two proposals for Medicaid funding. The Hospital Association and the st ate agree on the need to reduce the disparity in reimbursement s for low - income patients; however, the hospital system strongly opposes a proposal to force hospitals to pay a portion of the state222s Medicaid costs ( Clarion - Ledger, 1/25 ). Missouri Governor Proposes Health Care Expansion Amidst Budget Cuts : Facing a $261 million budget shortfall, Governor Jay Nixon (D) has proposed budget cuts to close the gap while attem pting to keep his campaign promise to expand health care coverage. Under the governor222s plan , an additional 62,000 residents would receive health care coverage. The plan seek s to enroll an additional 26,000 children through premium cuts and increased enr ollment efforts while expanding Medicaid eligibility for 35,000 adults by raising the income cut off to 50 percent of the federal poverty level ( AP via Kansas City Star, 1/27 ). Changes to Missouri222s Mental Health Care : Governor Jay Nixon (D) proposes cutting the Department of Mental Health222s b udget by $19.7 million. The cut, which is three percent of the department222s budget, would not necessitate firing employees. In addition, the governo r proposes new department funding for 2010 , totaling $36 million. The governor also suggests transferring the management responsibility for the mental health center in Columbia to the University of Missouri. The proposed management change would not reduce the number of available beds ( NBC, 1/28 ; NBC, 1/29 ; Missourian, 1/28 ). Nevada Upda te: Nevada222s Health Care Situation : As reported in a previous Financing News Pulse (1/23 edition) , Nevada222s Department of Health will receive a 4 percent increase to its budget over the next four years; however, the state222s Medicaid program and some associ ated services are in turmoil. Nevada plans to cut Medicaid provider reimbursements by 10 percent and shift money from the state222s Indigent Accident Fund to Medicaid to increase the state222s federal match ( Las Vegas Review - Journal, 1/24 ). Nevada lawmakers may reject Governor Jim Gibbons222 (R) proposed cuts as a result of expert testimony claiming they only shift costs and may even increase them. Medicaid will cover an estimated 235,0 0 0 Nevadans by 2011 ( AP via Press Enterprise, 1/26 ; Las Vegas Review - Journal, 1/27 ). Update: Effects of Mental Health Care Cuts Outli ned: The Division of Mental Health and Developmental Services explained the effects of the 8.8 percent reduction in the division222s budget reported last week in the Financing News Pulse . The division will cut 200 jobs, reduce services, and close 11 of the state222s 21 rural mental health clinics. As a result of the cuts , the SAM HSA222s Weekly Financing News Pulse January 30th 2009 1/30/09 11 division will lose $33 million in FY10 and $25 million in FY11. Southern Nevada will be disproportionately affected ( Las Vegas Rev iew - Journal, 1/24 ). New Hampshire Proposal to Eliminate Hospital Medicaid Fees : New Hampshire222s House Finance Committee has cleared a proposal to eliminate hospital222s Medicaid fees as part of a $16 million budget reduction package. The fee in question is paid to hospital - employed doctors who see patients in their offices. H ospitals and the state are debating the financial ramifications of the change and the state222s interpretation of federal Medicaid rules ( Concord Monitor, 1/23 ). Hospital officials have criticized the cuts ( Sea Coast Online, 1/28 ). New Mexico Chang es in New Mexico Managed Behavioral Health Contract: The New Mexico Behavioral Health Purchasing Collaborative has selected OptumHealth to manage its behavioral health services. OptumHealth replaces ValueOptions New Mexico and will begin a four year contract on July 1st ( AP via KDBC, 1/22 ). New York Changes to Medicaid Rules to Affect Elderly New Yorkers : The Centers for Medicare and Medicaid Services (CMS) told New York it m ust modify the way it applies a Medicaid rule designed to protect married couples222 income when one partner requires nursing home care . The state previously applied the rule to couples receiving nursing- home - level care in their home but CMS says such pract ices are no longer permissible. The rule change will force couples to admit the ill spouse to a nursing home or lose Medicaid income protection for in - house treatment. The New York Health Department estimates that 3,000 couples are affected by the change ( New York Times, 1/23 ). Update: Kathy Jimino of Rensselaer County Support222s Schumer222s Proposal: Previous issues of the Financing News Pulse (1/16 and 1/23 editions) report ed that Rep. Chuck Schumer (D - NY) has requested that Medicaid funds be made available to New York222s counties as part of the federal Medicaid assistance in the stimulus bill. Rensselaer County Executive Kathy Jimino support222s Schumer222s plan. Rensselaer County projects Medicaid expenses will exceed $31 million in 2009 though only 20,500 county residents utilize the program ( The Record, 1/26 ). New York City Est imates Federal Aid , Medicaid Funds will Total $1.6 Billion : Mayor Michael Bloomberg (R) reports that the City of New York will receive $1.6 billion in federal Medicaid assistance and a total of $3.4 billion in federal assistance under the federal stimulus bill. The city222s deficit is projected to hit $11.3 billion in two years ( New York Times, 1/25 ). Ohio County Boards Facing Steep Behavioral Health Cuts: Lake a nd Geauga Counties will see 38 to 43 percent cuts in state funding for behavioral health care this year. Lake County will receive SAM HSA222s Weekly Financing News Pulse January 30th 2009 1/30/09 12 $662,415 less than the $1,702,158 it was slated to receive as well as an additional 24 percent cut to its alcohol and drug se rvices budget. The county passed a new levy to generate $4.6 million to replace lost funds ( News - Herald, 1/24 ). Pennsylvania State Issued $3.3 Million in Improper Medicai d Payments: The Pennsylvania Auditor General found that the Depart ment of Public Welfare made improper Medicaid eligibility determinations for more than 1,600 individuals from 2005 to March 2008 resulting in a loss of $3.3 million in improper payments. Mo st of the improper payments 227 $3.1 million 227 were monthly capitation payments to managed care organizations. In the fiscal year ending in 2009, Pennsylvania222s Medicaid program had a $14.4 billion budget of which the state contributed $6.7 billion. The article includes misspent dollars by county ( PR News Wire, 1/28 ). Uninsured Exceed One Million: A report by Market Decisions LLC conclu des that there are now over one million Pennsylvanians without health care coverage . The report estimates that the unemployment rate is eight percent but notes that conditions have likely worsened since the survey was conducted in May 2008 ( Pittsburg Business Times, 1/29 ). Tennessee Governor Asks Departments to Prepare for 15 Percent Cut, Will Not Rely on Stimulus : Before proposing his budget officially on February 9th, Governor Phil Bredesen (D) has asked state departments to begin planning for 15 percent spending cuts. The governor says that after federal stimulus legislation is passed he will amend the budget accordingly. Estimates say the stimulus package would provide Tennessee222s Medicaid Program 227 TennCare 227 an additional $700 million. Tennessee222s budget gap is estimated to be as large as $1 billion ( Tennessean, 1/28 ). T exas Panel Recommends Changes in Value Calculation for Charity Care Provided by Hospitals : A panel convened by state legislators proposed a standard for defining the cost of charity care provided at non - profit hospitals. The report states that available funding sources offset most of the charity care; however, the system requires additional transparency and accountability . The report also recommends limiting charity care to those with incomes below 200 percent of the federal poverty level ( Fort Worth Star Telegram, 1/26 ; Kaiser Daily Health Policy Report, 1/27 ). Utah Update: Utah Legislators Propose Alternative to Governor222s Budget : Governor Jon Huntsman 222s (R) proposed budget, analyzed previous ly in the Financing News Pulse (1/16 edition) , limits cuts on individual state agencies to seven percent. However, l egislators are proposing a 15 percent across - the - board cut for the fiscal year beginning in July. No details have been offered yet on the implications for health care or behavioral health; however, the cuts are vastly larger than those previously planned by the governor222s office ( AP via Forbes, 1/26 ). SAMHSA222s Weekly Financing News Pulse January 30th 2009 1/30/09 13 Vermont Governor Proposes Premium Increases for Vermont Public Health Insurance Programs: As part of a package designed to eliminate a $201 million budget gap, Governor Jim Douglas (R) is proposing increased premiums for three state insurance programs: Dr . Dynasaur, Vermont Health Access, and Catamount Health. Dr. Dynasaur provides health care to the state222s needy children, Vermont Health Access provides insurance to low income adults with children, and Catamount Health serves other uninsured residents ( Burlington Free Press, 1/24 ). Advocacy groups question the governor222s decision to impose higher fees on poor Vermonters and suggest raising taxes on more affluent residents to increase state revenue ( MSNBC, 1/25 ). Since last year, 11,000 additional residents enrolled in Vermont222s state health programs. Washington Governor Says Stimulus Not a 223Cure All224 but Medicaid Prospects are Good: Governor Chris Gregoire (D) cautions that federal stimulus money will not solve the state222s budget crisis and notes that the federal funds will come with specific spending guidelines. However, the governor noted that the outlook for the state222s Medicaid program has improved with the passage of the U.S. House222s version of the stimulus bill (see page 1) . T he governor222s budget assumed $800 million in additional federal Medicaid dollars but the House bill would yield closer to $1.9 billion ( AP via Seattle Times, 1/27 ). Wisconsin Update: Wisconsin222s Proposed Hospital Tax Would Yield Disproportionate Benefits to Milwaukee: Last week the Financing News Pulse detailed a plan by Governor Jim Doyle (D) to tax hospitals and bring in additional federal Medicaid matching funds. City - level estimates now in dicate that Milwaukee hospitals will receive an additional $300 million in federal matching funds over the first three years of that plan . Hospitals222 funding would vary by the extent to which they serve underprivileged populations ( Milwaukee Journal-Sentinel, 1/25 ). Reaction to the hospital tax plan has been mixed ( Green Bay Press Gaze tte, 1/27 ). Wisconsin Estimated to Receive $1 Billion for Medicaid: A report by the Center for Budget and Policy Priorities estimated that, under the stimulus package under consideration at the time of the report, Wisconsin would receive $1 billion in additional Medicaid funding. The National Conference of State Legislatures also reported that the state could receive $3 billion in other federal assistance ( Wisconsin State Journal, 1/23 ).
