SAMHSA222s Weekly Financing News Pulse: State and Local Edition April 28, 2010 4/28/2010 1 SAMHSA222s Weekly Financing News Pulse: State and Local Edition Alaska Arizona California Colorado Connecticut Florida Georgia Kansas Louisiana Maine Maryland Massachusetts Mississi ppi Montana Nebraska New York North Carolina Oklahoma Oregon Utah Washington West Virginia Wisconsin To Subscribe to SAMHSA222s Weekly Financing News Pulse, please go to the following link and choose 223Health Care Financing224: https://service.govdelivery.com/service/multi_subscribe.html?code=USSAMHSA&origin=http://www.samhsa.go v/enetwork/success.aspx For quest ions or comments, please contact Kevin Henness y ( kevin.hennessy@samhsa.hhs.gov ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition April 28, 2010 4/28/2010 2 Around the States: State and Local Behavioral Health Financing New s Alaska DOC to Move RSAT Program out of Wildwood Correctional Complex, Replacing it with LSSAT : The Alaska Department of Corrections (DOC) will eliminate the Residential Substance Abuse Treatment (RSAT) Cognitive Therapeutic Community at its Wildwood Correctional Complex, and replace it with a Life Success Substance Abuse Treatment (LSSAT) program. The RSAT is an intensive peer -based program that can serve up to 80 inmates annually at a cost of $12,000 per inmate. The LSSAT is a 90 - day outpatient program that can serve up to 100 inmates annually at a cost of $2,500 per inmate. DOC projects the move will bette r serve the changing Wildwood population, which is moving toward more inmates serving shorter sentences. DOC will move the RSAT to Goose Creek Correctional Center once construction on the facility is completed in 2012. Until then, the DOC will transfer patients requiring the intensive program to a facility in Hudson, Colorado ( Peninsula Clarion, 4/22 ). Arizona Update: House Committee Approves Measure Restoring CHIP and Medicaid Cuts : On April 21, the Arizona House Human and Health Services Committee unanimously approved a measure that reauthorizes the state222s CHIP, KidsCare, and reverses changes to eligibility that cut enrollment to the state222s Medicaid program, the Ariz ona Health Care Cost Containment System (AHCCCS). The measure would reauthorize KidsCare outright at a funding level of $9 million, and would reverse the eligibility reduction for AHCCCS with $385 million, conditional upon Congressional approval of an extension of the federal Medicaid funding contained in the American Recovery and Reinvestment Act (ARRA). The $8.9 billion budget Governor Jan Brewer (R) signed into law on March 18 eliminated funding for KidsCare and reduced the eligibility for AHCCCS, which would eliminate 310,000 from Arizona222s Medicaid rolls. A study by the AHCCCS says the elimination of KidsCare and the planned reduction of the Medicaid rolls could cost the state $1 billion annually in federal matching funds ( Business Week, 4/21 ; Kaiser Health News, 4/22 ) . California Sacramento County DBHS Proposes Budget Cuts : The Sacramento C ounty Department of Behavioral Health Services (DBHS) proposed cutting its budget to save the county $17.5 million. The cuts include the elimination of four contracts with regional support teams, which are nonprofit clinics that provide outpatient service s. The county has already cut funding for those programs by over half over the past year. The department proposes replacing those entities with an expansion of the county222s Adult Psychiatric Aftercare Clinic and four new outpatient mental health 223wellnes s centers224 that county workers would staff. If the county approves the cuts, 6,500 additional patients will have to find care elsewhere. The cuts also include reductions in mental health services in juvenile institutions, special education, drug and alcohol abuse, and other programs. The proposed cuts will be debated in hearings in June ( Behavioral Health Central, 4/21 ; California Healthline, 4/21 ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition April 28, 2010 4/28/2010 3 Colorado Governor Signs Executive Order on Health Reform Implementation and Four Bills on Health Care : On April 20, Governor Bill Ritter (D) signed an executive order establishing a board of health care policy advisors from the public, private, and nonprofit sectors to oversee the process of health care reform implementation under the new national health care reform law. On the same day, the governor signed four bills into law regarding health care. Two aim to improv e transparency in insurance company documents, with one requiring the language on insurance company forms to be no more complicated than the tenth grade reading level, and the other requiring insurers to follow set standards to describe benefits contained in their coverage packages so consumers can more easily compare them. The other t wo offer loan forgiveness; one for doctors, nurses, and other health care providers willing to work in rural and underserved communities and the other for nurse educators ( Denver Post, 4/20 ; AP, 4/22 ; Kaiser Health News, 4/21 ). Connecticut House Approves B ill Allowing Municipalities to Purchase Drugs through State Program : On April 21, the Connecticut House unanimously approved legislation ( HB 5295) that would allow cities and towns to purchase prescription drugs through the state employee health insurance program. Advocates intend the legislation to lower municipalities222 prescription drug costs . The bill now goes to the Connecticut Senate ( The Boston Globe, 4/20 ; Kaiser Health News, 4/21 ). Florida Update: Sponsors of House Medicaid Overhaul Declare Proposal Dead: Sponsors of Florida House legislation to overhaul the state222s Medicaid program say the proposal will not advance further this year, but that they intend to attempt it again in 2011. The legislation would have moved nearly all of the beneficiaries of the state222s Medicaid program f rom a fee-for-service system to a managed care system by 2015 and would have would added Miami-Dade County to a managed care pilot program of five counties in 2012. The lawmakers say that regardless it is imperative that the state apply for an extension o f the federal waiver for the pilot program, which will otherwise expire on June 30 ( Business Week, 4/26 ). Legislature Approves Proposed Amendment Blocking Individual Mandates : On April 22, the Florida House and Florida Senate both approved a proposed constitutional amendment ( HJR 37 ) that would bar any laws that require individuals to participate in any health care system, such as the individual mandate provision within the national health care reform legislation. The proposed amendment does not have to go before Governor Charlie Crist (R), but 60 percent of voters must approve of the measure in November. The measure is contingent upon the success of the multistate lawsuit challenging the constitutionality of the federal health care reform legislation. If that suit fails, the Supremacy Clause of the U.S. Constitution would likely trump any action blocking the mandate at the state level ( The St. Augustine Record, 4/23 ; Kaiser Health News, 4/23 ; New York Times, 4/22 ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition April 28, 2010 4/28/2010 4 Georgia DCH Reports $26 Million Recovered in Medicaid Fraud in FY2009 : The Georgia Department of Community Health announced that it recovered $26 million in fraudulent Medicaid claims in F Y2009, which lasted from July 2008 to June 2009. The DCH Inspector General222s Office investigated 2,631 cases during that period, closed 1,006 of them, and handed over 28 to the Georgia Medicaid Fraud Control Unit for investigation of possible criminal act ivity . Georgia recovered $16 million in fraudulent Medicaid claims in FY2007. Investigators attribute the increase in funding recovered to Georgia222s participation in a national investigation of Pfizer, Inc. and the Georgia Medicaid False Claims Act of 2007. The Act allows the state to collect triple the amount of losses incurred from fraud and rewards whistleblowers with up to 30 percent of the money recovered ( Atlanta Jour nal Constitution, 4/23 ; Kaiser Health News, 4/23 ). Kansas IVAX and Omnicare to Pay $807,000 to Kansas Medicaid Program in Settlement : IVAX will pay Kansas $119,567 and Omnicare will pay Kansas $687,650 as part of a multi -state lawsuit settlement. The state will put the money into the Medicaid program. The suit was over alleged kickbacks the companies used to defraud Medicaid, one of which involved the antipsy chotic drug Risperdal ( Wichita Business Journal, 4/27 ). Louisiana House Approves Constitutional Amendment Barring Penalties for Individual Mandate : On April 20, the Louisiana House Insurance Committee approved a proposed constitutional amendment stating that no one can be forced to pay a penalty for not carrying insurance. The Patient Protection and Affordable Care Act contains an individual insurance mandate that is enforced through fines. To be included on the October 2 ballot, the full Louisiana House and the Louisiana Senate would have to approve the measure by a two - thirds majority ( New York Times, 4/20 ). Maine Superior Court Rules in Favor of Rate Rejection : On April 21, the Maine Superior Court ruled that state regulators made an acceptable decision in rejecting Anthem Blue Cross and Blue Shield of Maine222s proposed rate increase of 18.1 percent for individual health plans and allowing only a 10.9 percent rate increase , which became effective July 1, 2009. Anthem argued that the 10.9 percent increase was not enough to cover risk and allow for profit. The court ruled that the insurer is not entitled to a mandated profit margin under Maine law. Anthem222s proposed 22.9 percent rate increase for two individual coverage plans for this y ear is still pending approval. Anthem has not yet decided whether it will appeal the court222s decision ( The Boston Globe, 4/22 ; Kaiser Health News, 4/23 ). Marylan d Legislature Approves Assignment of Benefits Bill: On April 12, the Maryland House followed by the Marylan d Senate approved legislation ( SB 314) that allows patients to have their health insurer send payment directly to out -of -network doctors who treat them. In exchange for agreeing not to directly bill the patients, on -call doctors that are out -of -network wo uld receive the greater of either 140 percent of SAMHSA222s Weekly Financing News Pulse: State and Local Edition April 28, 2010 4/28/2010 5 the average rate paid to one of the insurer222s contractual physicians for the same procedure or 140 percent of the average amount paid to out -of -network providers for the same procedure in 2009, adjusted for medical inflation. Hospital -based out -of -network doctors would receive the greater of either 140 percent of the average amount paid to contracted doctors for the same procedure or the same amount paid by the insurer to another out-of-network physician for the procedure , also adjusted for medical inflation. The bill does not prevent doctors from opting to forgo the arranged pay schedule in the legislation and bill patients directly, though advocates project that many will choose not to due to the strain it puts on administrative costs. The bill now goes to Governor Martin O222Malley (D) for his approval ( Baltimore Busin ess Journal, 4/23 ; Kaiser Health News, 4/23 ) . Massachusetts Update: Judge Orders Insurers to Submit Rate Increases at 2009 Levels : On April 21, Judge Stephen N eel of Suffolk Superior Court ordered Harvard Pilgrim Health Care and Fallon Community Health Plan to submit premium increases calculated using April 2009 base rates for insurance coverage for individuals and small businesses, instead of the higher rate increases they had requested . The rates are 8 to 12 percent below what Harvard Pilgrim Health Care sought and 18 to 32 percent below what Fallon Community Health Plan sought. Both companies agreed to comply, but they are appealing the rejection of their pr oposed rate increases with the Massachusetts Division of Insurance (DOI). On April 1, Massachusetts Insurance Commissioner Joseph Murphy rejected 235 of 274 proposed health insurance rate increases, after which six insurers, including Harvard Pilgrim Health Care and Fallon Community Health Plan, filed suit to have an injunction placed on the rate rejections. Suffolk Superior Court ruled against granting the injunction and told the insurers they must exhaust the appeals process within the DOI before the court would hear their case. The other four insurers have already complied with the state222s request ( The Boston Globe, 4/22 ; Kaiser Health News, 4/22 ). Mississippi Lawmakers Propose Ballot Initiative Barring Individual Mandate : State Representative Alex Monsour (R) and State Representative Steven Palazzo (R) filed a proposed ballot initiative that would amend the Mississippi Constitution to prohibit laws that require a person or employer to participate in a health care system or plan. To get the measure onto the ballot, p etitioners have one year t o gather signatures from 17,587 registered voters in each of the five Congressional districts that Mississippi had in 2000. However, to get the initiative onto the November 2011 ballot, they will need to collect the signatures by October 2010 ( New York Times, 4/21 ; Kaiser Health N ews, 4/22 ). Yazoo City Medicaid Office Closed Indefinitely : On April 27, state officials announced that they have closed the Medicaid office that serves beneficiaries in the Yazoo C ity area indefinitely due to tornado damage. The damage occurred on Apri l 24 ( Clarion- Ledger, 4/27 ). Montana State Auditor Announces High-Risk Pool will be Operational by S ummer with Federal Grant : On April 26, Montana Auditor Monica Lindeen announced that Montana would have its high -risk insurance pool operational by this summer. The national health care reform law requires a national network of high- SAMHSA222s Weekly Financing News Pulse: State and Local Edition April 28, 2010 4/28/2010 6 risk insurance pools to cover those who cannot otherwise obtain insurance until insurance exchanges become operational in 2014. A $16 million federal grant will fund the high -risk pool in Montana at no cost to the state. Montana already has a similar pool set up so the action will not require legislative a pproval ( The Seattle Times, 4/26 ; Kaiser Health News, 4/27 ). Nebraska HHS Appeals Court Ruling on Working Stipulations for Medicaid : The Nebraska Department of Health and Human Services (HHS) filed an appeal with the Nebraska Supreme Court requesting that the court overturn a Lancaster County Court decision and allow the department to tie Medicaid coverage to working requirements. Lancaster County Court ruled that HHS did not have the authority under the state222s Welfare Reform Act to impose that requirement. HHS previously required single parents with children over six years old to work a minimum of 30 hours per week to be eligible for Medicaid, and required two parent families to work a combined 35 to 55 hours per week depending on whether they received federal assistance for childcare. The Nebra ska Supreme Court will hear the case on April 28 ( Business Week, 4/26 ). New York Couple Offers Private Funds to NY Presbyterian Hospital for Psychiatric Services: Barbara and Donal d Jonas announced that they would donate $500,000 this week to New York Presbyterian Hospital . The hospital will use the funds to provide mental health services to patients admitted for non -psychiatric reasons ( The Wall Street Journal, 4/27 ). North Carolina Governor Proposes Budget, Restores Mental Health Funding : On April 20, Governor Beverly Perdue (D) released her proposed $19.1 billion budget. The proposed budget restores $40 million for community mental health programs that was cut from the pr evious year222s budget. The funding includes $12 million to fund local private hospital beds for mental health patients needing short-term care ; $1 million for Project CARE to offer respite -care services to an additional 500 families with individuals with dementia and $535,000 for direct- care staff training to improve the quality of care in state mental health facilities ( Winston - Salem Journal, 4/22 ; Kaiser Health News, 4/22 ). Oklahoma State Medicaid Enrollment to be Offered Online : The Oklahoma Department of Human Services (DHS) announced that it projects that online enrollment for SoonerCare, the state222s Medicaid program, will be operational by July 12. The online enrollment program will be available for approximately 75 percent of applicants at that time, including those with behavioral health needs. DHS will then phase in online enrollment for the elderly, blind, and disabled. Those who wish to meet with a DHS caseworker to enroll instead of doing it online may still do so. D HS established the enrollment program with a two - year federal grant of $6.1 million ( Times Record News, 4/27 ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition April 28, 2010 4/28/2010 7 Oregon George Fox University Receives Grants for Behavioral Health Program : The Swindell Charitable Trust and Providence Health & Services provided George Fox University222s Behavioral Health Clinic with over $270,000 in grants to offer behavioral health services to low-income children and families in Yamhill County. The Swindell Charitable Trust is providing capital funding for the project, while Providence Health & Services gave $25,000 to open the clinic a year ago, and will give additional funds to move the clinic toward sustainability. The clinic will also serve as a training and education program for doctoral- level students, based on a similar model at the University of North Carolina. Fees for services at the clinic are nominal or waived. The clinic will begin offering services this fall ( Newberg Graphic, 4/21 ). DOC Renovating Oregon State Penitentiary IMU to Offer Mental Health Services : The Oregon Department of Corrections (DOC) is remodeling the Intensive Management Unit (IMU) at the Oregon State Penitentiary to offer mental health services to prisoners. The facility is being converted t o offer a 49-bed mental health infirmary for 223crisis stabilization224 treatment of acute mental illness, a 65 -bed day treatment unit for those coming out of the crisis care unit, and a 73 -bed behavioral health unit to offer specialized services and supervision of disruptive prisoners with mental illnesses. The remodeling will cost $80,000 ( Statesman Journal, 4/25 ). Utah State Judicial Council Approves Davis County Mental Health Court : On April 26, the Utah Judicial Council unanimously approved a mental health court program for Davis County. The county has applied for a federal grant to offset part of the cost of the program, but will proceed with implementation of the court on a smaller scale if it does not receive the gran t ( Standard -Examiner, 4/27 ) . Washington City of Seattle Asks State Supreme Court to Require AG to Withdraw from Federal Suit over Health Reform : On April 22, the City of Seattle asked the Washington Supreme Court to require Attorney General Rob McKenna to withdraw from the multistate lawsuit challenging the constitutionality of the Patient Protection and Affordable Care Act . The city222s petition claims that McKenna did not have the authority to join the suit without a request from the governor or another state officer. Seattle is the first city to challenge the lawsuit ( Seattle Post-Intelligencer, 4/22 ; Kaiser Health News, 4/23 ). West Virginia Report Shows Alcohol and Drug Abuse Costs WV Schools $13 Million Annually : The West Virginia Partnership to Promote Community Well -Being, a strategic policy and planning board appointed by Governor Joe Manchin (D), release a report that claims alcohol and substance abuse cost s West Virginia schools $13 million annually. That figure includes funding for prevention, treatment, and school -based mental health programs in elementary and secondary schools, as well as colleges and universities, and does not include spending on staffing, special education programs, drug and alcohol related truancy, property damages, and legal costs. The partnership recommends that the state adopt a proposal it offered last year, which would include $23.5 million annually for prevention, intervention, treatment, and recovery services. Lawmakers attempted to raise that funding earlier this year with an unsuccessful SAMHSA222s Weekly Financing News Pulse: State and Local Edition April 28, 2010 4/28/2010 8 proposal for a tax on beer and an unsuccessful bid to use surplus Medicaid funds. The report is the third in a series released by the partnership. The first two reports found the annual cost of alcohol and substance abuse to be $116 million and $333 million for the health care system and the criminal justice system, respectively ( The Charleston Gazette, 4/22 ). Wisconsin Drug Companies Reach $7.75 Million Settlement with State: On April 20, Attorney General J.B. Van Hollen announced that the state reached a settlement with four of the 36 de fendants in a 2004 lawsuit over Medicaid reimbursements. The lawsuit alleges that the companies manipulated wholesale drug prices of medications to get surplus Medicaid reimbursements . The companies agreed to pay $7 million in restitution and $750,000 in punitive damages. The companies are the German drug manufacturer Boehringer Ingelheim GmbH , and its subsidiaries Boehringer Ingelheim Roxane Inc. , Ben Venue Laboratories Inc., and Roxane Laboratories Inc . Three other companies, Amgen Inc., Baxter Health care Corp. , and Immunex Corp., have already reached settlements in the case. The other 28 cases are under a stay of court trial proceedings until an appeal by Pharmacia Inc. is heard. Pharmacia is appealing the decision of its trial last year, in which t he company was ordered to pay $22.4 million in forfeitures and other costs ( AP, 4/21 ; Justice News Flash, 4/23 ). Legislature Approves Bill Creating New Health Coverage Program : On April 20, the Wisconsin Assembly approved legislation creating a new state health coverage program called BadgerCare Basic. The program would offer coverage to childless adults on the waiting list for the state222s BadgerCare Core plan, which stopped accepting new enrollments when the program222s funding was exhausted. BadgerCare Basic would be paid for with premium payments and copayments from those receiving coverage. There are 34,000 individuals on the waiting list that would be eligible for coverage under the new plan. The bi ll goes to Governor Jim Doyle (D) for approval ( Business Week, 4/20 ; Fox 6, 4/22 ; Kaiser Health News, 4/21 ).