WeeklyFinancingNewsPulsefinal20090327.pdf (PDF | 421.41 kb)
SAMHSA222s Weekly Financing News Pulse March 27, 2009 3/27/09 1 National Health Financing News President Obama Prioritizes Health Reform in FY2010 Budget House and Senate Budget Committees Approve Budget Resolutions , Set Up Process Fight; Committee Chairmen Continue to Work Towards Health Reform Obama to Nominate IHS Director HHS Names National Coordinator of Health IT Study Finds Numb er of Uninsured Workers Has Risen Since the 1990s States Consider Drug Tests for Welfare Recipients Walgreen s Profits Dropping As Consumers Visit Doctors Less Ins urers Say They Would End Medical Status Pricing Under Mandated Health Coverage Drug Industry Advocates Favor Breaking FDA Into Two Agencies Mentally Ill Increasingly Housed in Nursing Homes Employers Increasingly Using Dependent Eligibility Audits to Reduce Health Costs Report finds Alzheimer222s Disease On the Rise, Along With Associated Health Care Costs Senate Holds Hearings on Alzheim er222s Disease and Increasing Health Costs CMS Ends Referral Fees for Sales Agents of Medicare Advantage Plans House Testimony Discusses Access to VA Benefits for Soldiers with PTSD Electronic Health Records (EHRs) Uncommon at Hospitals AMA Files Class - Action Suit Against WellPoint APA Will No Longer Accept Industry Sponsors for Medical Seminars APA Lobbies Congress for Health Reform, Privacy Rights, and Swift Action on Parity Retiree Medical Costs on the Rise Around the Hill: Hearings on Health Financing Around the States: State and Local Behavioral Health Financing News Alaska California Colorado Florida Georgia Illinois Iowa Kansas Kentucky Maryland Massac husetts Michigan Minnesota Missouri Nebraska Nevada New Jersey New Mexico New York Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina Texas Utah Virginia West Virginia Wisconsin For questions or comments, please contact Sarah Wattenberg (sarah.wattenberg@samhsa.hhs.gov). National Health Financing News President Obama Prioritizes Health Reform in FY2 010 Budget : At his news conference on March 24, President Barack Obama reaffirmed his commitment to health care reform, saying that it is impossible to balance the country222s budget without addressing the rising cost of the health care system ( Kaiser Daily Health Policy Report, 3/25 ). A Congressional Budget Office (CBO) report, released on SAMHSA222s Weekly Financing News Pulse March 27, 2009 3/27/09 2 March 20 , projected that President Obama222s budget would require borrowing $9.3 trill ion over the coming decade, $2.3 trillion more than the President222s administration projected. Peter Orszag , director of the Office of Management and Budget (OMB) , said that he believes the CBO222s estimates are too pessimistic but acknowledged that, if they are correct, the result would be unacceptable ( Kaiser Daily Health Policy Report, 3/23 ). The Obama administration has indicated that it expects Congress to modify porti ons of the budget and that it is willing to accept reductions as long as signature initiatives, like health care reform, are included ( Kaiser Daily Health Policy Report, 3 /24 ). House and Senate Budget Committees Approve Budget Resolutions , Set Up Process Fight ; Committee Chairmen Continue to Work Towards Health Reform : On March 25, the House Budget Committee approved a $3.45 trillion budget for fiscal year 2010 that inc ludes the use of the budget reconciliation process to pass comprehensive health care reform , and calls for the creation of a deficit natural health care reserve. Committees with jurisdiction must draft legislation for the use of the fund by September 29. According to the Budget Committee Chair Rep. John Spratt (D - SC), the President222s major initiatives are all included ( Kaiser Daily Health Policy Report, 3/26 ). The Senate Budget Committee approved its blueprint for the FY2010 budget on March 26 . The $3.5 trillion Senate budget cuts more of Obama222s domestic funding but still maintains his key initiatives. Most importantly, the Senate budget does not include the reconciliation instructions included in the House budget designed to tie health reform to the budget process ( Washington Post, 3/27 ; CQ Today, 3/26). The tactical issue will be a key factor when the budgets are resolved in conference and has already been discussed by administration officials when Kansas Governor K athleen Sebelius (D), President Obama222s nominee for Department of Health and Human Services (HHS) secretary, and Nancy - Ann DeParle, the director of the White House Office for Health Reform, met with congressional lawmakers on March 27 to discuss plans for health reform ( Kais er Daily Health Policy Report, 3/25 ). Obama to Nominate IHS Director: On M arch 23 , the Obama a dministration said it will nominate Dr. Yvette Roubideaux, a n assistant professor at the University of Arizona222s College of Medicine , as the director of the I ndian Health Service (IHS). Dr. Roubideaux previously worked as an IHS medical officer and clinical director and is currently th e co - director of a program at the University of Arizona, which focuses on disease prevention in Native American communities. ( Kaiser Daily Health Policy Report, 3/24 ). HHS Names National Coordinator of Health IT : The Department of Health and Human Services (HHS) named Dr. David Blumenthal as the national coordinator for health care information technology last week . Dr. Blumenthal was a Harvard Medical School professor, the director of the Institute for Health Policy at Massachusetts General Hospital, and a senior health care advisor to Presid ent Obama during the campaign ( Tampa Bay Business Journal, 3/23 ; Kaiser Daily Health Po licy Report, 3/20 ). Study Finds Number of Uninsured Workers Has Risen Since the 1990222s : A study by the Robert Wood Johnson Foundation found that 26.9 million workers were uninsured in the mid - 2000s compared to 20.7 million who were uninsured during the mid 1990s. The study also found that 14 states currently have uninsurance rates of 20 percent or greater a mong the working age population , whereas, in the 1990s , only eight states had rates that high. In addition, the study found that 90 percent of chil dren have health coverage ( Kaiser Daily Health Policy Report, 3/24 ). The complete study is available on the Robert Wood Johnson Foundation website . SAMHSA222s Weekly Financing News Pulse March 27, 2009 3/27/09 3 States Consider Drug Tests for Welfare Recipients: Eight states are considering legislation to require recipients of food stamps, unemployment benefits, or welfare to submit to random drug testing. Branches of the state legislature in Kansas and Oklahoma while bills have been proposed in Arizona, Florida, Hawaii, Minnesota, Missouri, and West Virginia. Michigan222s law mandating random testing was struck down under 4th Amendment violations ( AP via WBBM, 3/26 ). W algreen s Profits Dropping As Consumers Visit Doctors Less : Walgreens executives attributed the company222s 6.7 percent drop in profit to a dramatic change in consumer behavior surrounding physicians and prescription drugs. CEO Gregory Wasson said that consumers are visiting their physicians less and therefore filling fewer prescriptions. Walgreens has struggled less than othe r pharmacies as result of declining prescription drug us e in part because of their drug savings program which gives discounted prices for a small annual fee ( Kaiser Daily Health Policy Report, 3/24 ). Insurers Say They Would End Medical Status Pricing Under Mandated Health Coverage : America222s Health Insurance Plans and the Blu eCross BlueShield Association authored a letter to the Senate Finance Committee and Senate Heath , Education, Labor and Pensions Committee saying that their members would willingly end their practice of setting premiums based on an individual222s health status if the U.S. mandated health coverage. Instead, the groups said they would vary insurance charges by factors like age and place of residence. The health insurance companies also believe that, with a health insurance mandate, they could eliminate the practice of excluding individuals from coverage based on preconditions ( Bloomberg, 3/25 ; Kaiser Daily Health Policy Report, 3/25 ) . Drug Industry Advocates Favor Breaking FDA Into Two Agencies: T he Associated Press (AP) reports that several drug industry advocates and executives favor splitting the Food and Drug Administration (FDA) into two agencies, one to handle food safety and another to handle medical product approval. Rep . Rosa DeLauro (D - CT) introduced legislation (H.R. 875) on February 4 to move the FDA222s food safety obligations to a new entity ( Kaiser Daily Health Policy Report, 3/23 ; AP via Houston Chronicle, 3/22 ). Mentally Ill Increasingly Housed in Nursing Homes: An analysis by the Associated Press (AP) found young and middle - aged mentally ill patients are increasingly being housed in nursing homes. Almost 125,000 mentally ill non- elderly adults are currently housed in U.S. nursing homes, up from 89,000 in 2002. The AP cited lack of hospital beds and fewer state - run facilities as primary reasons for th e shifting mentally ill population and highlights that, with advances in in - home care, nursing homes may accept mentally ill patients as a source of steady income in the face of a declining percentage of elderly residents requiring nursing home care. The AP also offers a state - level analysis of mentally ill patients in nursing homes ( AP, 3/22 ; US News & World Report, 3/23 ; Employers Increasingly Using Eligibility Audits to Reduce Health Costs : A recent survey of 489 employers by Watson Wyatt found t hat companies are increasingly utilizing audits to determine the eligibility of dependents enrolled in company health plans with the goal of reducing plan cost. The survey found that the audits were more common than health risk appraisals or case manageme nt improvements. Technology improvements have made the eligibility audits faster and cheaper and allow employers to address the estimated 5 to 12 percent of employees222 dependents that are ineligible for benefits ( Kaiser Daily Health Policy Report, 3/25 ). SAMHSA222s Weekly Financing News Pulse March 27, 2009 3/27/09 4 Report finds Alzheimer222s D isease On the Rise, Along With Associated Health Care Costs : A report issued by the Alzheimer222s Association on March 24 found that the number of American s with Alzheimer222s is on the rise . 5.1 million Americans over age 65 had the disease in 2004. In addition, the report found that the health care costs for elderly Alzheimer222s patients are more than triple that of other elderly U.S. residents. Per patient cost for Alzheimer222s patients was $33,007 annually in 2004 and the association estimates that both the prevalence and the cost have increased since those data were collected ( Kaiser Daily Health Policy Report, 3/25 ). The Alzheimer222s Association report is available on their website . Senate Holds Hearings on Alzheimer222s Disea se and Increasing Health Costs : On March 25, a Senate Special Committee on Aging heard testimony from the Alzheimer222s Study Group suggesting that the disease could cost Medicare and Medicaid $1 trillion annually by 2050. Advocates at the hearing called fo r a public - private partnership to raise additional research money and caregiver funding ( Kaiser Daily Health Policy Report, 3/26 ). The Alzheimer222s Study Group222s report i s available on their website . CMS Ends Referral Fees for Sales Agents of Medicare Advantage Plans : On February 24 , t he Centers for Medicare & Medicaid Services (CMS) ordered private insurers to stop paying 223referral fees224 to sales agents who steer beneficiaries towards a company222s Medicare Advantage (MA) or Medicare prescription drug plan. The fees were developed by MA companies in response to caps CMS placed o n sales commissions for MA enrollment. CMS222 letter ending the referral fees noted that the fees appeared to be an attempt to circumvent the 223cap224 rule ( Kaiser Daily Healt h Policy Report, 3/25 ). House Testimony Discusses Access to VA Benefits for Soldiers with PTSD: Veterans groups testified before the House Veterans222 Affairs Disability Assistance and Memorial Affairs Subcommittee to advocate for increased Veterans Heal t h Administration coverage for post t raumatic stress d isorder (PTSD) in returning veterans. The groups advocated weakening the standards for proving that injuries are 223service - related224 , citing the nearly 50 percent of PTSD claims denied because soldiers ca nnot prove the condition is related to their military service. The current standard does not allow non - combat soldiers (e.g. truck drivers) to claim PTSD as a service - related illness ( AP via Chicago Tribune, 3/25 ; Kaiser Daily Health Policy Report, 3/26 ). Electronic Health Records (EHRs) Uncommon at Hospitals : A study funded by the Department of Health and Human Services (HHS) and the Robert Wood Johnson Foundation and recently published in the New England Journal of Medicine (NEJM) found that just 1.5 percent of hospitals have fully implemented EHR systems and another 8 to 11 percent have partially implemented systems . Hospitals most commonly cited cost as the main barri er to health IT implementation. Health IT implementation costs can be up to $20 million for a small hospital or $200 million for a large hospital. Th e study is considered to first reliable examination of health IT implementation ( Kaiser Daily Health Policy Report, 3/26 ). The study222s abstract is available on the NEJM222 s website . AMA Files Class -Action Suit Against WellPoint: The American Medical Association (AMA) and many state medical groups filed a class - action lawsuit against WellPoint for setting artificially low out - of - network reimbursement rates through flaws in a database known as Ingenix ( Financing News Pulse 2/20). The plaintiffs are seeking reimbursement as well as reform to the payment system; however, an exact figure has not been stipu lated ( Kaiser Daily Health Policy Report, 3/26 ). APA Will No Longer Accept Industry Sponsors for Medical Seminars: The American Psychiatric Association (APA) announced on Wednesday , March 25, that it will end its practice of accepting funding SAMHSA222s Weekly Financing News Pulse March 27, 2009 3/27/09 5 from drug or medical device makers for educational seminars held at its annual meeting. Some experts were concerned that private financing resulted in seminars that were biased tow ards particular drugs or devices produced by the funders. The APA estimates that such financing accounted for $1.5 million of the association222s $50 million annual budget ( Kaiser Daily Health Policy Report, 3/26 ). APA Lobbies Congress for Health Reform, Privacy Rights, and Swift Action on Parity: The APA lobbied congress for three key issued in February: ensuring that privacy rights are maintained throughout the transiti on to electronic health records, solidifying mental health222s place in the broader health reform discussion, and urging the swift creation of implementation guidelines and regulations for the Paul Wellstone and Pete Domenici Mental Health Parity and Addicti on Equity Act of 2008 (PL 110 - 343) ( Psychiatric News, 3/20 ). Retiree Medical Costs on the Rise: A study by Fidelity Investments found that retirees on Medicare will need an estimated $240,000 to cover medical expenses throughout their retirement. That figure is up 6.7 percent since Fidelity222s survey last year and has increased 50 percent since Fidelity began its survey seven years ago ( AP via Los Angeles Times, 3/26 ). Around the Hill: Hearings on Health Financing Senate Health, Education, Labor and Pensions Committee : Health Insurance Market Overhaul 10:00 a.m. March 24, 430 Dirksen Senate Vete rans222 Affairs Committee : IT Solutions for Veterans222 Benefits Delivery 9:30 a.m. March 25, 418 Russell Senate Commerce, Science and Transportation Committee : Health Insurance Industry 10:30 a.m. March 26, 253 Russell 10:00 a.m. March 31, 253 Russell Senate Health, Education, Labor and Pensions Committee : HELP Votes on Nominations 10:00 a.m. April 1, 430 Dirksen Senate Veterans222 Affairs Committee : Health- Related Legislation 2:30 p.m. April 22, 418 Russell House Veterans222 Affairs Committee : Mental Health N eeds of Veterans 10:00 a.m. April, 30 334 Cannon Around the States: State and Local Behavioral Health Financing News Alaska Survey Finds Doctors Don222t Accept Medicare Patients : A survey by the Institute of Social and Economic Research at the University of Alaska Anchorage found that only 13 of 75 primary care physicians in Anchorage are willing to accept new Medicare patients. In addition, the study found that only 5 of those 13 doctors willing to take new Medicare patients were in private practice. In contrast, nearly every doctor surveyed in smaller cities and rural Alaska was willing to accept new Medicare patients ( Anchorage Daily News, 3/25 ). SAMHSA222s Weekly Financing News Pulse March 27, 2009 3/27/09 6 California State Community Health Clinic s Struggle in Recession : A study by the California HealthCare Foundation found that two - thirds of community health centers in California were breaking even or running a deficit in 2006, prior to the economic downturn. Now, with greater numbers of uninsured and unemployed residents seeking treatment from community health centers, decreased private donations, and decreased state revenue, community health centers are reporting even more financial difficulties. In California, the American Recovery and Reinves tment Act (ARRA ) is expected to allocate $58 million in aid to uninsured residents, $15 million to create new health clinics, and $100 million to address capital infrastructure programs ( Kaiser Daily Health Policy Report, 3/24 ). San Joaquin County to Address Mental Health Staffing Shortage : San Joaquin County222s mental health staff has dropped from 19 psychiat rists to 13 and a planned 1,800 - bed prison health care facility will further strain the county222s mental health resources. A plan to resolve staffing shortages with $3.1 million in funding through 2016 will be submitted to the state for approval; however, some worry that the money, which is slated to come from Propos ition 63 funds, may be used for other programs under California222s pending budget and Proposition 1E ( Financing News Pulse 2/20, 3/6 editions) ( Record Net, 3/25 ). Health Committee Approves Bill to Expand COBRA Assistance to State Residents : The Assembly Health Committee approved a bill (AB 23) which, like its counterpart s in Oregon and Utah (see Oregon and Utah below), expands California222s Cal - COBRA law which allows employees from companies with between two and 19 employees to retain their health coverage after being laid off. The proposed bill would notify affected employees of their eligibility and allow those who lost their jobs after September 1, 2008 but bef ore the ARRA was passed to retroactively apply for Cal- COBRA. Cal - COBRA enrollees are eligible for the COBRA subsidies outlined in the ARRA for federal COBRA ( Online Broadcasting System News, 3/25 ). San Bernardino County Mental Health Funding Cuts : San Bernardino County222s Department of Behavioral Health faced cutbacks of 15 percent in January and the county was forc ed to pass some of the funding reductions on to its contract service providers. Numerous behavioral health service providers in the county have subsequently made layoffs and cutback services, as a result of the reduction in county funds. The county222s dir ector of behavioral health hopes to restore $3.5 million in state funds from Prop osition 63; however, the future of Prop osition 63 funds is still unclear ( Financing News Pulse 2/20, 3/6 editions) ( Press Enterprise, 3/21 ). CMS Cuts Funding for Residency Program : Stanislaus County222s Family Medicine Residency Program , responsible for training residents and handling 35,000 patient visits annually, has lost its federal funding and owes CMS $19.1 million in reimbursements that funded the program from 2001 through 2008. The program formerly operated at the county hospital; however, when the hospital closed in 1997, the program was moved to Doctors Medical Center. CMS says the program no longer qualified for federal funding after the move because of caps on the number of residents that hospitals can count for reimbursements. CMS funding was crucial the program but federal officials say they are bound by the Balan ced Budget Act of 1997 ( Modesto Bee, 3/22 ). Colorado House Approves Bill to Impose Hospital Fees, Fund Health Expansions : On March 24, Colorado222s House approved a bill (HB 1293) that would increase hospital fees to fund state health care programs. The bill would charge hospitals 2.4 percent of their annual revenue to raise $600 million, which would, in turn, SAMHSA222s Weekly Financing News Pulse March 27, 2009 3/27/09 7 be used to expand the state222s Medicaid and CHIP programs to 100,000 additional reside nts. The state222s $600 million would be doubled by federal matching funds and the $1.2 billion would raise the CHIP eligibility ceiling from 205 percent of the federal poverty level ( FPL ) to 250 percent, expand the Medicaid eligibility ceiling for parents from 60 percent of the FPL to 100 percent, and enable single adults earning up to 100 percent of the FPL to enroll in Medicaid. Twenty - three other states use similar programs successfully ( Kaiser Daily Health Policy Report, 3/26 ). Florida Health Care Agency Draws Down First Round of ARRA Medicaid Funds : The Agency for Health Care Administration (AHCA) initiated its first draw down of $363 million in increased Medicaid funding from the ARRA for the quarter ending December 31, 2008 . The agency has also submitted a request for $412 million of the $454 million for the quarter ending March 31. The ARRA has temporarily raised Florida222s Federal Medical Assistance Percentage ( FMAP) from 55.4 percent to 67.64 percent which state estimates indicate will yield roughly $4.2 billion for the state222s Medicaid program over 27 months ( AP via WCTV, 3/24 ). New Behavioral H ealth Facility Opens in Tampa: The non- profit Drug Abuse Comprehensive Coordinating Office opened a new $18 million dollar behavioral health facility in Tampa, Florida. The project was funded with $16 million from a city bond and matching funds from Hills borough County, the Florida Department of Children & Families, Wachovia Bank, several non - profit groups, and private donations. The facility will consolidate services previously offered at different campuses and offer a total of 68 beds ( Tampa Bay Online, 3/24 ). Cover Florida has Low Enrollment in First Months: Two months after Cover Florida ( Financing News Pulse 3/13), the state222s program in which insurers offer low - cost health plans, begun on January 5, the program has only 952 enrollees. Of those enrolled, 82 percent are enrolled in catastrophic coverage plans. The state does not subsidize the plan premiums, which some experts believe is contri buting to the low enrollment ( Kaiser Daily Health Policy Report, 3/26 ). West Florida Hospital Closing Behavioral Health Program: West Florida Healthcare is ending its o utpatient behavioral health program effective April 17. The hospital plans to reorganize its behavioral health services to focus on inpatient services but a spokesman for the hospital said the closure was precipitated by the retirement of one of the two f ull time physicians working in the outpatient program. The hospital would not disclose how many patients would be affected but said that letters have already been mailed informing them of the closure ( Pensacola News Journal, 3/22 ). Georgia Update: House Budget Restores Medicaid Funding : Florida222s House of Representatives passed its budget for fiscal year 2010. The budget includes $200 million in Medicaid payments to hospitals and phys icians that had been cut by Governor Sonny Perdue222s (R) proposed budget previously reported in last week222s Financing News Pulse (3/20) ( Swainsboro News, 3/23 ). Illinois League of Women Voters Raises Awareness for Behavioral Health, Seek s Dedicated Local Tax : Fifty - nine counties in Illinois have Community Health Boards which operate through local property tax funding; however, Boone and Winnebago counties b oth lack local funding for behavioral health and must therefore rely exclusively on federal and state funding in combination with public/private fundraising. The League of Women Voters of Greater Rockford has taken up the behavioral health SAMHSA222s Weekly Financing News Pulse March 27, 2009 3/27/09 8 cause but will be hosting educational public forms prior to pushing for a dedicated levy which the group feels will fail due to worsening economy ( Rockford Regis ter Star, 3/23 ). Iowa Senate Approves Bill to Expand Children222s Health Insurance : The Iowa Senate voted 30 - 18 to pass a bill (SF 389) to extend health insurance to 30,000 uninsured children and establish a commission to help residents obtain affordable health coverage. The bill will increase the income eligibility limit for the state222s CHIP to 300 percent of the FPL . In addition, the bill will create a commission to explore ways to increase insurance rates among low and middle - income residents. If pas sed, the bill is expected to cost Iowa $8 million annually with additional costs covered by federal matching funds ( Kaiser Daily Health Policy Report, 3/23 ; Des Moines Register, 3/20 ). Kansas House Approves FY 2010 Budget with Additional Funding for Health Care : On Monday, the Kansas House approved a $13.4 billion budget for fiscal year 2010. The budget closes a $680 million budget deficit through budget reductions as high as 10 percent to some state agencies , including cuts to re - entry programs for parolees. In contrast, House lawmakers added $13 million in new spending to avoid waiting lists for children222s health care and disability programs ( Kansas City Star, 3/24 ). The House budget would spend $1.2 million to insure 8,000 more children through the state222s CHIP by raising the eligibility ceiling from 200 percent of the FPL to 250 percent ( Kansas City Star, 3/23 ). Kentucky CMS Restores Funding to Behavioral Health Facility : CMS officials restored some Medicaid f unding for Oakwood, a 200 - bed mental health hospital which lost CMS funding in May, 2008 for repeated Type A violations including two deaths. The Oakwood facility consists of four units, only three of which have been cleared for Medicaid funding; however , state officials say that they plan to resubmit applications to clear the fourth unit within three weeks. The facility222s operating budget is roughly $75 million annually which the state has been paying in full since losing federal funds. CMS usually cov ers $60 million of the annual operating costs ( Lexington Herald - Leader, 3/24 ). Maryland Senate Rejects Bill to Ease Medicaid Fraud Collections : The Maryland Senate rejected a bill tha t would have given greater latitude to state officials to pursue Medicaid fraud and collect damages. Opponents say that the bill would have encouraged frivolous lawsuits and, in turn, increased costs for providers and patients. Lobbyists for physicians, hospitals, doctors, and pharmaceutical companies strongly opposed the bill saying that it is dangerous to financially incentivize the prosecution of fraud. Governor Martin O222Malley222s (D) budget included an anticipated $22 million slated to be raised from Medicaid fraud cases ( Baltimore Sun, 3/24 ; Kaiser Daily Health Policy Report, 3/26 ). Massachusetts School Community Considers Adopting State Law to Shift Retirees from District Health Plan to Medicare: The Bridgewater - Raynham S chool District accepted Section 18a of Massachusetts state law 32B , which requires all eligible future retirees to be covered by Medicare rather than the district222s health plan. The school committee is also considering adopting Section 18 of the law which would allow the district to force past eligible retirees from the districts222 plan into Medicare ( Wicked Local, 3/24 ). Town Budget Seeks to Reduce Health Insurance Costs : Northborough , MA is seeking to cut $400,000 from the town222s $15.4 million fiscal year 2010 budget through changes to the town employee222s health SAMHSA222s Weekly Financing News Pulse March 27, 2009 3/27/09 9 benefits plan. The plan would raise both deductibles and copays, with the average copay i ncreasing from $5 to $15. The health plan modifications require union approval because they apply to numerous unionized town workers ( Metro West Daily News, 3/23 ). Kaiser Report Shows Community Heath Centers in MA Saw Greater Patient Load During Health Reform: A report by the Kaiser Family Foundation illustrates that Massachusetts saw a significant increase in community health center utilization between 2005 and 2007 when the state was implementing its universal health coverage law. The study found that health centers continue to serve an increasing share of the uninsured population ( Kaiser Commission on Medicaid and the Uninsured, 3/24 ). Michigan Hospital Closing Inpatient Mental Health Unit : Gerber Memorial Health Services announced that , in April 2009, it will close its 16 - bed inpatient mental health treatment facility in Fremont. Geber said that the move, which is expected to eliminate 35 jobs, came as a result of declining revenue, increased expenses, a smaller case load, and the decision by Pine Rest, another inpatient facility, to expand its treatment capacity ( Muskegon Chronicle, 3/22 ). Minnesota House Budget Cuts Health Spending : The budget proposed by the Democratic - Farmer - Labor dominated House proposed, among other cuts, a five percent reduction in health and human services funding totaling $400 million in cuts. Spending reductions , which did not affect education funding, totaled $1.6 billion while the budget also included $1.5 billion in tax increases and $1.7 billion in cost shifting ( Saint Paul Legal Ledger, 3/20 ). Missouri Missouri House Approves Budget Without Governor222s Medicaid Expansion: The Financing News Pulse (3/13 edition) reported that Governor Jay Nixon (D) reached a compromise with the state222s hospitals to impose a provider tax, limit state hospital payments, and draw down additional federal funds to expand the state222s Medicaid program to an additional 35,000 residents with out an added cost for the state. After lengthy debate, the Republican- controlled House passed a budget which did not include the governor222s budget neutral Medicaid expansion ( Missouri Net, 3/26 ). Report Shows that Missouri222s Previous Medicaid Cuts Affected Local Communities, Insured Residents : A Missouri Foundation for Health study found that Missouri222s Medicaid cuts in 2005 were passed along to privately insured residents and local communities. Some fear that Medicaid cuts currently under consideration by the legislature could yield similar results ( Public News Service, 3/26 ). The full report is available on the Missouri Foundation for Health222s website . Nebraska State Posts up Mental Health Resource Website : Nebraska222s Department of Health and Human Services has set up a behaviora l health website, the Network of Care Web , to allow residents quick and easy access to mental health resource with in the state ( Seattle Times, 3/19 ). Nevada Health and Human Services Prioritizes List of Programs to Add to State Budget : On March 24, the Nevada Department of Health and Human Services presented a prioritized list of 16 health cuts made in SAMHSA222s Weekly Financing News Pulse March 27, 2009 3/27/09 10 the proposed budget which the department would like 223added back224 should funding permit. The department222s first priority is $3.15 million for the state222s CHIP to raise the current 25,000 child cap to 32,000. Second on the department222s list of priorities is restored funding to nine of the 11 rural mental health clinics slated for closure under Governor Jim Gibbons (R) proposed budget ( Lahontan Valley News, 3/24 ). Nearly 20 Percent of Residents Lack Health Insurance : A study released Tuesday by State Health Access Data Center at the University of Minnesota found that 19.8 percent of Nevada residents were uninsured between 2006 and 2007, slightly higher than the national average of 18.4 percent. As a result, Nevada Health Centers are seeing larger numbers of residents seeking health care that they previously received under employe r- sponsored health plans ( CBS, 3/24 ). Senate Panel Hears Testimony on Medicaid Study : The Senate Health and Education Committee heard testimony on Monday presenting a bi ll (SB 307) which would institute a Medicaid study examining ways to expand Nevada222s Medicaid program . The study would focus on examining the state222s Medicaid rates in comparison with other states. Nevada222s Medicaid program is ranked 51st in per - capita s pending ( AP via KTVN, 3/23 ). New Jersey State Senate Passes Bill Forcing Public Disclosure of Hospitals222 Preventable Errors : The New Jersey Senate unanimously passed a bill wh ich would require the Department of Health and Senior Services to publicly disclose preventable medical errors reported by hospitals. The bill would also prevent hospitals and physicians from charging for medical errors or hospital- acquired conditions not reimbursable by CMS. Previous state legislation already required hospitals to disclose preventable medical errors to the state ( Kaiser Daily Health Policy Report, 3/24 ) . Governor Proposes Medicaid Cuts : Governor Jon Corzine222s (D) budget cuts $3.3 million from Medicaid by ending funding for erectile dysfunction drugs and generates $1.4 million through new copays for residents receiving HIV/AIDS medication through Medicaid. The budget plan also imposes $2 copays for all prescription drugs covered by Medicaid, with a $10 monthly cap ( Kaiser Daily Health Policy Report, 3/20 ). Governor Co rzine222s HIV/AIDS proposals were poorly received by HIV advocates and the governor later indicated that he is willing to eliminate the copays in question from his proposed Medicaid changes ( Statehouse Bureau, 3/24 ). New Mexico University of New Mexico to Self Insure Employee Health Benefits : The University Of New Mexico Board Of Regents voted to move the university222s employee health benefits to a self - insurance pla n. The new plan will offer the same tiers as the old plan but will allow the university and its employees to see no health insurance cost increase for FY2010. The university expects the move will save $1.5 million in FY2010 ( University of New Mexico Today, 3/23 ). New York Governor and Legislative Leaders Reach Tentative Agreement on Health Budget : Governor David Paterson (D) has reached a tentative agreement with state lawmakers an d health care industry officials to eliminate cost - of - living adjustments to Medicaid reimbursement rates, saving the state about $300 million, and postponing proposed changes to Medicaid payment systems for nursing homes and hospitals. The deal is not yet solidified and is opposed by numerous Senate Democrats including the Chairman of the Finance Committee, Carl Kruger (D - Brooklyn) ( New York Times, 3/26 ). SAMHSA222s Weekly Financing News Pulse March 27, 2009 3/27/09 11 New York City222s Pub lic Hospitals to Cut Mental Health, Community Clinics : Alan Aviles , president of New York City222s Health and Hospitals Corporation ( HHC), announced that the city222s public hospital system plans to cut 400 jobs and close some children222s mental health clinics, pharmacies, and community health centers. Aviles said the cuts are necessary because of reductions in Medicaid payments, larger numbers of uninsured residents seeking care, and rising costs. He also asked Governor David Paterson (D) to direct some of New York222s $10 billion in ARRA funds to the city222s hospitals. The state health commissioner said Patterson222s administration was considering aid to city hospitals and that the HHC should postpone cuts until after the state has passed a budget ( Kaiser Daily Health Policy Report, 3/23 ). West c hester Medical Center Makes Budget Cuts and Layoffs : West c hester Medical Center will lay off 108 employees, eliminate 107 positions through voluntary resignations, transfer 107 employees to new positions, and leave 75 positions vacant in an effort to reduce hospital costs. Many of the affected employees work at the hospital222s Behavioral Health Center but the cuts also include 21 executiv e positions. The Center will also close the Taylor Care Center, a 100 - bed nursing home, to save $40 million. The hospital attributes much of its budget woes to reductions to New York222s Medicaid program and officials say they cannot project the hospital b udget for fiscal year 2010 until the state passes a budget indicated the level of Medicaid funding ( Lower Hudson Valley Journal News, 3/25 ). State to Offer Prescription Drug Discount Card for Low - In come, Disabled Residents : On March 23, New York officials announced the New York Prescription Savers Cards program which provides discounted prescription drugs to low - income residents between the ages of 50 and 64 and disabled residents of any age. Govern or David Paterson (D) believes that 35,000 non - Medicare - eligible residents would be eligible for the prescription discount card program. The program will take effect April 1 ( Kaiser Daily Health Policy Report, 3/25 ). Ohio Franklin County Community Health Board Cuts Funding : The Alcohol, Drug and Mental Health Board of Franklin County approved $1.76 million in new budget reductions this week on top of $3 million the boar d has already cut. The board cut five percent from 26 agencies and nearly $100,000 from its own budget. This round of cuts focuses more heavily on mental health in part because the board222s Department of Mental Health funding was recently reduced but also because previous cuts have focused on alcohol and substance abuse services. The local cuts are the result of a loss of $4 million in state funds since July, 2008. Funding may be restored for some of the cuts through Ohio222s budget and funds from the ARRA ; however, the state has yet to pass a final budget ( Columbus Dispatch, 3/25 ). Oklahoma Expansi on of Medicaid Assisted Living Eligibility Awaits Governor222s Approva l: The Oklahoma Health Care Authority approved a measure which would expand the eligibility for the Medicaid Advantage Waiver Program which allows low - income seniors to enroll in assisted - living facilities and expands in - home care. Governor Brad Henry (D) has 90 days to approve or reject the change ( Oklahoman, 2/22 ). Oregon State Seeks to E xpand Health Insurance Benefit to the Unemployed: The Oregon Department of Consumer and Business Services has proposed legislation ( H.B. 2433 ) to expand the state222s health insurance continuation law to allow residents to more fully utilize the COBRA provis ions ( Financing News Pulse 2/13 edition) outlined in the ARRA. Though federal COBRA applies only to employers with 20 or more employees, Oregon222s law applies to smaller businesses and other employers not subject to federal SAMHSA222s Weekly Financing News Pulse March 27, 2009 3/27/09 12 COBRA. The legislation would ex pand Oregon222s law to provide health coverage for up to nine months and allow residents who lost their jobs prior to the announcement of the ARRA to enroll in the program. Both provisions are included in the ARRA as it applies to federal COBRA. Oregon res idents who receive assistance under the state law are still eligible for the federal COBRA assistance in the ARRA. T he proposed changes in the state law would allow more state residents to take advantage of the federal subsidy for longer ( Bend Weekly, 3/23 ). Pennsylvania Employer222s Health Costs Rise in Pittsburg Region : A survey by Cowden Associates Inc. found that employer222s health care costs rose by 7.2 percent in the Pittsburg regio n between 2008 and 2009. The 2008- 9 period is the first in five years where the cost increase was higher than in previous years. The average cost of individual coverage increased $204 per employee and the average cost for family coverage increased $744 p er employee ( Pittsburgh Tribune - Review, 3/26 ). Update: Transition Planned for Those Affected by Excela Closure : The Financing News Pulse (3/20 edition) reported that E xcela hospitals are eliminating their outpatient services. A transition team has been established to help former Excela patients shit to new community - based care. Westmoreland County Mental Health, Mental Health America of Westmoreland, Westmoreland Case Supports Inc. , and Value Behavioral Health will form the team to help clients shift to the new services. The change will affect an estimated 2,000 to 4,000 mentally ill patients ( Pittsburgh Tribune - Review, 3/21 ). New Treatment Center for Co - Occurring Disorders : Roxbury Treatment Center is adding a new facility in Franklin County which will cater to individuals needing both mental health and substance abuse treatment. Roxbury would not reveal the cost of the new facility but it will expand the hospital222s total capacity to 112 beds. In addition, the new facility is expected to create 25 to 30 new jobs for mental health professionals and support staff ( Patriot News, 3/23 ). Rhode Island Governor Plans First Medicaid Change : Governor Do n Carcieri (R) plans to eliminate dental coverage for 38,000 residents enrolled in Rite Care, Rhode Island222s Medicaid program. Eliminating the dental coverage would save the state $525,000 annually which Governor Carcieri would put towards the state222s deficit . The change would also be the first major change to the state222s Medicaid program under its new 223global Medicaid waiver224 ( Financing News Pulse 1/16, 1/23, 2/6, 3/6, and 3/13 editions ) ( Kaiser Daily Health Policy Report , 3/23 ). Governor222s Budget Would Eliminate Program Designed to Close Medicare Drug Coverage Gap: Governor Don Carcieri222s (R) budget proposes eliminating a program designed to close the Medicare 223doughnut hole224 in prescription drug coverage. The plan would abolish the Rhode Island P harmaceutical Assistance to the Elderly , exposing 18,469 beneficiaries to gaps in their Medicare prescription drug coverage. The governor222s plan will save the state $1.1 million annually ( Kaiser Daily Health Policy Report, 3/20 ). South Carolina Mental Health Center Offering New ER Service : The Charleston Dorchester Mental Health Center opened an urgent care center on Marc h 2 to accommodate patients with immediate psychi atric needs and reduce lines for general E.R. medical services. In addition, the new center provides more specialized care for individuals with psychiatric needs ( NBC, 3/20 ). SAMHSA222s Weekly Financing News Pulse March 27, 2009 3/27/09 13 Auditors say State Failed to Mana ge Medicaid Transportation Program : The Legislative Audit Council said that the Department of Health and Human Services failed to establish goals and performance measures to manage the $52 million Medicaid transportation program in South Carolina. A spokesman for the department said they are currently correcting the problems highlighted in the audit ( AP via Charlotte Observer, 3/26 ). Texas State Offers Loan Repayments to Pediatricians Who Accept Medicaid: The Texas Department of State Health Services will repay as much as $140,000 in student loans over four years for dentists and physicians who treat Medicaid beneficiaries. The $150 million program was created in response to a lawsuit alleging poor access to children222s health care. Physicians must treat Medicaid beneficiaries for four consecutive years to become eligible ( Kaiser Daily Health Policy Report, 3/24 ). VA Medical Center Expands Mental Health Care: The Veterans Affairs Creek Medical Center in Amarillo, Texas has doubled it mental health staff and increased it nurs ing staff by more than 20 percent in an effort to cope with the mental health needs of incoming veterans from the wars in Iraq and Afghanistan. The hospital222s budget increase from $135 million in 2008 to $146 million this year and plans have been made for a $7 million mental health facility slated for construction in 2011 ( Amarillo.com, 3/22 ). Utah Survey Finds More Adults and Fewer Children are Uninsured: The Utah Healthcare Access Survey found that 11,000 more Utah residents were uninsured in 2008 than in 2007 and that Utah222s uninsurance rate for 2008 was 10.7 percent. However, the report also found that the number of uninsured children in the state declined by more than 13 percent to 76,000 children. State officials attribute the declining rate of children222s uninsurance to increased enrollment in the stat e222s CHIP but estimate that 55,000 of the currently uninsured children already meet the requirements for the program ( Kaiser Daily Health Policy Report, 3/25 ). Legislature Approves Bill Extending COBRA benefits to Laid- off Workers from Small Businesses: Like similar laws in California and Oregon (see above), the Utah Legislature has passed a bill ( HB 178) which allows employees of small businesses, those with under 19 workers, to enroll in the state222s COBRA and receive the federal subsidies outlined in the ARRA. In addition, like the ARRA, the Utah law allows workers laid off between September 1, 2008 and the passage of the ARRA to retroactively enroll in the program ( Kaiser Daily Health Policy Report, 3/20 ). V irginia Substance Abuse Programs to Receive Federal Funding : Governor Tim Kaine (D) announced that programs administered by the Department of Mental Health, Mental Retardation and Substance Abuse Services will receive $285,000 in federal funding. The fund ing targets Buchanan, Dickenson, Lee, Russell, Scott, Tazewell, and Wise Counties ( AP via Daily Press, 3/20 ). Court Rules State will Not Receive Medicaid Payments : The Commonwealth of Virginia lost a lawsuit alleging that HHS owed the state $11 million in federal reimbursements for fees charged by doctors at two public hospitals, the University of Virginia Hospital and the Virginia Commonwealth Uni versity222s Medical College of Virginia . The U.S. district judge found that the federal government did not owe the state. He said the services did qualify as 223hospital services224 because they were performed by separate physician practice groups at the hospi tal ( AP via Daily Press, 3/26 ). SAMHSA222s Weekly Financing News Pulse March 27, 2009 3/27/09 14 West Virginia Proposed Bill Would Examine Mental Health Services, Increase Medicaid Funding : A bill ( S.B. 672 ) proposed in the West Virginia Senate would create a committee of four senators and four members of the House of Delegates to examine the state222s mental health care system, recommend necessary changes, and propose legislation to implement them. In addition , the bill would raise Medicaid reimbursement rates for 33 mental health services if money remains in the budget after certain other expenses ( Charleston Daily Mail, 3/25 ). Proposed B ill Would Tax Methadone, Fund Treatment : A proposed bill ( H.B. 2027 ) in the West Virginia House of Delegates would tax methadone clinics $1 for every dose of methadone they dispense and use the estimated $1.5 million in revenue to fund prevention, intervention, and recovery program ( State Journal, 3/22 ). Wisconsin Counties Prepare for Governor222s Mental Health Budget Shift : Governor Jim Doyle222s (D) proposed 2009 - 2011 budget eliminates Wisconsin222s 40 percent funding of youth and elderly patients at Mendota Mental Health Institute in Madison and Winnebago Mental Health Institute near Oshkosh. The federal government will continue to pay its 60 percent share of patient costs; h owever, the governor222s budget shifts the state222s 40 percent obligation to counties. Waukesha County222s share of the expense will total $500,000 annually, Racine County222s will be $750,000 annually, and Milwaukee County will also be affected but county offic ials could not supply estimated figures. The governor222s budget includes some increased funding for counties to finance community - based mental health services ( Milwaukee Journal Sentinel, 3/24 ). Update: State Seeks Money for Medicaid Overcharges : As reported in the Financing News Pulse (2/6, 2/20 editions), Pharmica , a unit of Pfizer Inc., was found guilty of illegally overcharging the Wisconsin222s Medicaid program for prescription drugs. The jury in that case ordered Pfizer to pay $7 million in compensation to the state and $2 million in punitive payments for violating consumer protection laws. Wisconsin Attorney General J. B. Van Hollen is now seeking $100 to $200 for each individual vi olation of the state222s Medicaid laws. The 1.4 million instances bring the total sought by the attorney general222s office to $225 million ( Milwaukee Journal Sentinel via Trading Markets, 3/23 ).
