SAMHSA222s Weekly Financing News Pulse: State and Local Edition April 7, 2010 4/7/2010 1 SAMHSA222s Weekly Financing News Pulse: State and Local Edition Alabama Alaska Arizona California Colorado Florida Georgia Idaho Louisiana Maine Maryland Massachusetts Michigan Missouri New York North Dakota Ohio Oklahoma Oregon Rhode Island South Carolina Utah Washington 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/enetwo rk/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 7, 2010 4/7/2010 2 Around the States: State and Local Behavioral Health Financing New s Alabama Senate Approves Legislation Blocking Health Insurance Mandate : On April 1, the Alabama Senate approved legislation ( SB 233) stating that no person, business, or health ca re provider can be required to purchase insurance. The bill, which now moves to the Alabama House , runs contrary to the health care mandate within the national health care reform legislation signed by President Obama March 30( AP via Business Week ). Alaska SAMHSA Grant Funds API Videoconference Program : Using a $221,000 grant from the Substance Abuse and Mental Health Services Administration (SAMHSA), the Alaska Psychiatric Institute (API) has started providing behavioral health services via videoconference, targeting 200 small health care sites throughout the state. Videoconferencing technology allows patients to consult with providers over video feed, rather than in person. The service allows remote access to care and enable s behavioral health service pro viders to consult with one another more easily. S tate officials hope that the program will be self -sufficient by the time the grant funding is exhausted ( Anchorage Daily News, 4/3 ; Alaska Department of Health and Social Services ). Arizona Legislature Approves Federal Health Care Reform Lawsuit : On March 31, the Arizona House and Arizona Senate voted to allow Governor Jan Brewer (R) to circumvent Attorney General Terry Goddard and file a lawsuit challenging the constitutionality of the federal health care reform law, the Patient Protection and Affordable Health Care Act . Ariz ona will join 14 other states that have filed suit on the basis that the individual insurance mandate contained within the new law is unconstitutional ( Business Week, 4/1 ). Californ ia Santa Barbara ADMHS Proposes Behavioral Health Cuts : The Santa Barbara County Alcohol, Drug and Mental Health Services (ADMHS) Department proposed cutting services to uninsured patients in FY2011 to close a $6.6 million budget gap. In addition to a request from the Santa Barbara County Board of Supervisors to cut its budget by 7 percent, the ADMHS also expects a n $800,000 cut in state funding. The ADMHS must provide care to Medi -Cal patients for whom the department receives state funds; however, the ADMHS is only required to care for uninsured patients as county resources allow . On top of the planned service cuts , t he ADMHS plans to cut costs by working with eligibility specialists to increase coverage for the uninsured and provid e medication support at community health centers as part of a broader plan to reduce reliance on inpatient services. The department also plans to reduce its contract with Vista del Mar Hospital from $1.5 million to $1.2 million ( L ompoc Record, 4/1 ). LA Times/USC Poll Finds Most Californians Support National Health Care Reform : A poll conducted by the Los Angeles Times and the University of Southern California found that slightly more than half of Californians believe the count r y will be better off as a result of the new federal health care reform law, SAMHSA222s Weekly Financing News Pulse: State and Local Edition April 7, 2010 4/7/2010 3 the Patient Protection and Affordable Health Care Act . The poll also found that voters are more likely to vote for a candidate who supported the legislation, by a margin of 46 to 29 percent ( The Daily Herald, 4/4 ). Riverside County DPH Proposes Budget Cuts : The Riverside County Department of Public Health (DPH) has proposed reducing its FY2011 budget by $8.5 m illion, or 2 5 percent of its FY2010 budget. The proposal comes as the county faces a budget deficit of over $100 million for FY2011. If approved, the cuts would force the DPH to reduce staff and services ( California Healthline, 4/6 ; Press-Enterprise, 4/5 ). Colorado CMS Approves Medicaid Expansion Plan: On April 2, the Centers for Medicare & Medicaid Services (CMS) approved Colorado222s proposed plan to charge hospitals $600 million in provider fees. Colorado plans to use the fees to draw down federal matching funds and expand Medicaid to 100,000 additional residents. The state will discount the fee s for smaller hospitals and those treating large percentages of Medicaid and uninsured patients . The fees will take effect o n May 1 ( KUNC, 4/2 ) . House Approves $18.2 Billion Budget , Expands Prison Mental Health Capacity : On April 1, the Colorado House approved an $18.2 billion budget for FY2011. The budget includes a provision requiring the use of 126 beds at the original Colorado State Penitentiary for mentally ill patients . Prisoners will be transferred to Colorado State Penitentiary II to free up those beds, and t he budget allocates $10 million for an expansion of the facility. ( The Pueblo Chieftain, 4/2 ). Florida House and Senate Approve Budgets , Senate Proposes Medicaid Privatization : After the Florida Senate unanimously approved a $69.4 billion budget on March 31, the Florida House approved a $67.2 billion budget the next day along party lines. Both houses must now negotiate a single budget to present to the governor. The Senate budget allocates $880 million in unapproved federal Medicaid funding excluded from the Hou se budget . In addition, t he Senate version would privatize the state222s Medicaid program, institut ing an annual cap on the Medicaid budget, changing Medicaid benefits , implementing copayments and deductibles, and issuing vouchers for Medicaid recipients to purchase private insurance. If approved by Governor Charlie Crist (R) , the Medicaid privatization plan would require federal approval ( The Miami Herald, 4/1 ; The Miami Herald, 4/2 ; Kaiser Health News, 4/1 ) . Georgia Update: Senate Approves Hospital Fee , Changes to Health Insurer Taxes : On April 2, the Georgia Senate approved legislation ( HB 307 ) enacting a 1.45 percent fee on hospital revenues. Legislators expect the fee to raise $175 million a nnually. In addition, an amendment added to the bill cuts taxes on health insurance plans when the state222s shortfall reserve fund is above $500 million. The amended bill now returns to the Georgia House for final approval ( The New York Times, 4/2 ; Atlanta Journal - Constitution, 4/1 ; Kaiser Health News ) . SAMHSA222s Weekly Financing News Pulse: State and Local Edition April 7, 2010 4/7/2010 4 Idaho DHW Closing Offices Due to Budget Cuts: The Idaho Department of Health and Welfare has announced that it will close nine of its 29 field offices and lay off 126 workers because of state budget cuts. State officials project that the closures and layoffs will save the state $7 million. State officials also note that the closures will in crease client wait times and delay application processing ( KPVI, 4/6 ). Louisiana LGMC to Close Mental Health Unit; DHH Moves toward Community -Based Care : Lafayette General Medical Center will c lose its mental health unit on May 1 to increase capacity for its high demand medical and surgical units. The closure occurs during a state effort to cut inpatient mental health services and emphasize private community -based care . The Louisiana Departmen t of Health and Hospitals (DHH) plans to discharge 118 patients from state -run psychiatric hospitals , moving them in to private community homes and transferring another 138 beds to a private operator. DHH projects that privatizing six state -operated behav ioral health facilities will save $52.3 million ( The Daily Advertiser, 4/2 ) . Maine Governor Signs Law Barring Health Care Coverage Caps : On April 1, Governor John Baldacci (D) signed into law a measure ( LD 1620) prohibiting annual and lifetime caps on health insurance coverage. The new law takes effect on January 1, 2011, and applies to all individual and group insurance plans ( Morning Sentinel, 4/5 ; The Boston Globe, 3/30 ; DOTmed 3/30 ). Maryland Update: House GOP Caucus Proposes Medicaid Fraud Detection Measures : The Maryland House GOP Caucus has proposed auditing all state Medicaid claims, potentially through a private contractor. The caucus claims the measure would save $195 million annually. The Maryland Senate has already approved a competing plan backed by Governor Martin O222Malley (D) that allows whistleblowers to file suit against those committing fraud and r eceive a portion of the damages. The Senate plan also increases the damages the state can recoup on fraud suits and allows the state to join multi -state federal fraud lawsuits ( Maryland R eporter, 3/31 ). Massachusetts Insurance Commissioner Rejects Health Insurance Rate Increases, Insurers File Suit : On April 1, Massachusetts Insurance Commissioner Joseph Murphy rejected 235 of 274 proposed health insurance rate increases. The proposed i ncreases ranged from 7 percent to 34 percent. Murphy indicated that he rejected proposals that increased rates more than the medical inflation rate of 5.1 percent, did not justify variance in rates paid to different hospitals, and did not effectively nego tiate prices. The commissioner estimates that his rejections will save consumers $6 to $8 million per month. However, o n April 5, six insurers filed a lawsuit claiming that the Massachusetts Division of Insurance acted illegally in rejecting the rates. The suit goes before the Massachusetts Superior Court on April 8, where a judge will decide whether to grant a preliminary injunction against the rate rejection. The insurers filing suit are Blue Cross and Blue Shield of Massachusetts, Harvard Pilgrim Hea lth Care , Tufts Health SAMHSA222s Weekly Financing News Pulse: State and Local Edition April 7, 2010 4/7/2010 5 Plan, Fallon Community Health Plan, Health New England, and Neighborhood Health Plan ( New York Times, 4/1 ; The Boston Globe, 4/5 ; Kaiser Health News, 4/6 ). Update: Budget Shortfall Smaller th an Anticipated, Governor Proposes Plan to Close it : On March 30, Governor Deval Patrick (D) announced that the $295 million budget gap discovered during a March audit is actually $195 million. Approximately $125 million of th e gap is attributed to unanticipated increased Medicaid spending and t he federal government will provide approximately $77 million to the state222s Medicaid program, MassHealth , to help close the gap . In addition, the governor proposed eliminating the remaining $118 million shortfall by cutting spending by $38 million, reallocating $50 million from the state222s transportation fund, and using $30 million from the state222s rainy day fund. The Massachusetts Senate will likely vote on the measure this week ( The Boston Globe, 3/31 ). BCBS, Harvard Pilgr im Data Show Insurance Enrollment Abuse : New data from Blue Cross and Blue Shield of Massachusetts ( BCBS ) and Harvard P ilgrim Health Care indicate that numerous state residents are abusing the state222s health care laws. Insurers222 data indicates that many residents are purchasing individual health insurance for short periods during which they plan to incur costly medical ex penses then dropping coverage and paying the state222s $93 monthly fee for failure to obtain insurance. BCBS found that 936 individuals pa id for a maximum of three months of coverage in 2009 and averaged $2,200 per month in claims. Similarly, Harvard Pilgr im reported that 40 percent of those covered on individual plans for less than five months in 2009 averaged $2,400 per month in claims. To combat th is behavior, Governor Deval Patrick (D) has filed legislation that would restrict plan enrollment to twice per year and allow insurers to apply waiting periods prior to beginning coverage. The governor222s administration plans to release a report on data from all state insurers later this month ( The Boston Globe, 4/4 ) . Bill U nder Consideration to Overturn State Ban on Drug Coupons : Legislation currently before the Massachusetts House ( HB 4320) would allow drug manufacturers to provide patients with coupons for drugs, a practice that state law currently prohibits. Critics argue that the program would drive people to use pricier medications , but the bill222s sponsor, State Representative Peter Koutoujian (D), argues that the issue would not arise in Massachusetts because residents are required by law to purchase generic drugs when they are available ( The Boston Herald, 4/6 ). Michigan Governor Creates Council to Oversee Health Care Reform Implementation : On March 3 1, Governor Jennifer Granholm (D) signed an executive order creating the Health Insurance Reform Coordinating Council , comprised of seven members from state agencies led by Michigan Department of Community Health (DCH) Director Janet Olszewski . The council will coordinate state efforts to comply with the new federal health care reform legislat ion, the Patient Protection and Affordable Health Care Act . The governor222s executive order also creates an Office of Health Insurance and Consumer Assistance within the DCH to oversee insura nce companies and state banks and an Office of Financial and Insu rance Regulation to set up a state insurance exchange ( The Seattle Times, 3/31 ; Kaiser Health News, 4/1 ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition April 7, 2010 4/7/2010 6 Legislators Propose Health Care Reform : On April 1, State Senator Tom George (R) and State Representative Marc Corriveau (D) proposed new state health care reform measures. Like the recently signed federal health care reform plan, t heir plan would prohibit insurance companies from denying coverage based on pre-existing conditions and would allow children to remain on their parents222 insurance until age 26 . In addition, their proposal would require all insurance companies to pay into a catastrophic care fund , and create a state board to design a mandatory basic insurance plan for all insurers . The reform would also set up a $90 million fund paid for by Blue Cro ss and Blue Shield of Michigan (BCBS) to subsidize insurance for individuals earning up to 300 percent of the federal poverty level (FPL ) , impose more state control on insurance rates and allow BCBS to account for lifestyle factors when calculating premium s . BCBS is a tax -exempt insurer of last resort in Michigan ( Detroit Free Press, 4/1 ). Missouri State to Close Mental Health Hospital : On March 31, the Missouri Department of Mental Health (DMH) announced that it would close the Nevada Habilitation Center by 2012 to cut state costs . The state will transfer 60 of the 90 patients to group homes, while the 30 most severe cases will be transferred to other facilities throughout the state ( AP via CNBC, 4/1 ). New York State Offers Grants For Improved Outpatient Infrastructure : The New York State Department of Health (DOH) and the New York State Dormitory Authority will administer $50 million in gra nts to hospitals under the Healthcare Efficiency and Affordability Law for New Yorkers (HEAL NY). The grants will fund projects that improve hospitals 222 outpatient services in an effort to help hospitals adjust to new Medicaid payment formulas that state o fficials hope will reduce reliance on inpatient services. G rant applications are due on May 14 ( The Business Review, 4/2 ) . Senate GOP Releases Plan to Combat Medicaid Fraud: On March 17, the Senate Republican Task Force on Medicaid Fraud released a preliminary report containing 11 proposals to combat Medicaid fraud. The Senate GOP projects that the reforms could save the state $375 to $500 million annually. The reforms focus on localizing power to combat fraud, improving county222s a ccess to Medicaid enrollee data, improving the quality of enrollee data , and preventing enrollees from utilizing multiple doctors and pharmacists to acquire and abuse prescription drugs ( Legislative Gazette, 4/5 ). North Dakota North Dakota University System Chancellor Proposes Mental Health Services : North Dakota University System Chancellor Bill Goetz proposed that the North D akota State Board of Higher Education (BOHE) allocate $715,400 for mental health services for students in its 2011 -2013 budge t . The funding would ensure each campus has at least one full -time licensed mental health counselor, set up a contract for after -hours mental health services, and provide for one-time mental health training. The proposal incorporates recommendations from a task force that studied mental health needs in the state university system. The BOHE will vote on the budget this week ( The Grand Forks Herald, 4/4 ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition April 7, 2010 4/7/2010 7 Ohio Governor Creates Prescription Drug Task Force: On April 2, Governor Ted Strickland (D) signed an executive order creating the Ohio Prescription Drug Task Force , which will research prescription drug abuse in Ohio and report on immediate action that can reduce abuse. The task force will include public health and safety officials, professionals with medical and pharmacy backgrounds, an d state and federal officials. Governor Strickland has allocated $250,000 in U.S. Department of Justice (DOJ) Justice Assistance Grants for local law enforcement agencies to improve their efforts to reduce prescription drug abuse. The governor also cal led for greater use of Ohio222s Prescription Drug Monitoring Program (PDMP), the Ohio Automated Rx Reporting System. Though all pharmacists currently report into the PDMP, only one in five reference it before filling prescriptions ( Ironton Tribune, 4/4 ) . Greene County Consolidates Adult and Youth Mental Health Services to Contain Costs : On March 26, the board for Integrated Youth Services (IYS), a non - profit provider of behavioral health services for children in Greene County, voted to dissolve the agency as a cost containment measure . IYS previously contracted with the Clark, Greene, and Madison County Mental Health and Recovery Board to provide youth behavioral health servi ces. TCN Behavioral Health Services , a provider of adult behavioral health services in the same region, will take over youth behavioral health services for Greene County. TCN will provide the services for adults and youth in separate locations. County officials expect the consolidation to save $400 million annually ( Dayton Daily News, 4/3 ) . Oklahoma DOH Closes 17 Child Centers Offering Behavioral Health Services : The Oklahoma Department of Health (DOH) has announced that it will eliminate services at child guidance centers in 17 counties by the end of FY2010. The centers offer diagnos e s for children with behavioral, developmental, and speech problems ; classes for parents about raising children with such issues ; and resources to support the children in schools. State officials project that the cuts will yield annual savings of $ 1 to $1.5 million ( News On 6, 3/30 ). Oregon Senator Proposes Public Option: Oregon State Senator Alan Bates (D) has proposed the creation of a public health care plan in Oregon. Senator Bates proposes expanding the Oregon Health Plan, Oregon222s Medicaid program, under an amendment to the new federal health care reform law . Under the federal amendment , states may create their own health care programs as long as they contain costs and improve service delivery, requiring the federal government to grant the state a waiver to pursue a public option. If approved, the public plan could be operational by 2015 ( Mail Tribune, 4/1 ; Kaiser Health News, 4/1 ). Governor Refuses to Request DOJ Oversig ht of State Psychiatric Hospital : Governor Ted Kulongoski (D) has refused to voluntarily enter into a court -enforceable agreement authorizing the DOJ to oversee reforms at Oregon State Hospital. Advocates for the plan argued that it would improve the rate of reform and curb abuse of patients. The governor said that he is open to leadership and staffing changes at the hospital and that he is willing to bring in an outside consulting firm to evaluate patient care. The SAMHSA222s Weekly Financing News Pulse: State and Local Edition April 7, 2010 4/7/2010 8 state is currently using $458 million to build two new psychiatric hospitals to repla ce the existing building ( Statesman Journal, 4/6 ). Rhode Island HARI Study Projects $465.7 Million in Losses for RI Hospitals U nder National Health Care Reform : The Hos pital Association of Rhode Island (HARI) has released a study projecting losses of $465.7 million for Rhode Island222s 11 acute care hospitals over the next ten years because of national health care reform. HARI project ions indicate that federal Medicare r eimbursement changes will produce $400 million of those losses ( The Providence Journal, 4/5 ). South Carolina State Settles With Pfizer Over Unapproved Drug Advertising : South Carolina has settled a suit that the South Carolina Attorney General222s Office filed against pharmaceutical company Pfizer, Inc ., for illegally promoting the schizophrenia drug Geodon and the painkiller Bextra for un approved usages and dosages. Though the company does not admit wrongdoing under the settlement, Pfizer has agreed to pay $11 million in cash and provide free clinics with $1.65 million in drugs. The state plans to allocate most of the cash to its Medicai d fund and to the state Employee222s Insurance Plan ( The Post and Courier, 4/3 ). Senate Gives Second -Round Approval for Cigarette Tax to Raise Medicaid Funds: On March 31, the South Carolina Senate approved legislation ( H 3584 ) that would raise the cigarette tax by 50 cents per pack, to a total of 57 cents per pack. Under the bill, $120 million of the new funds would go to the state222s Medicaid program. The Senate will vote on the measure for a final time on April 13 ( New York Times, 4/1 ). Utah Update: Governor Signs Bills to Combat Prescription Drug Abuse : On March 29, Governor Gary Herbert (R) signed two bills ( HB 28 and HB 35 ) into law intended to improve the state222s ability to track 223doctor shopping224 by improving the Utah Division of Occupational and Professional Licensing222s (DOPL) prescription drug monitoring database. The new laws will make the database more up to date and user - friendly and will require hospitals to report poisonings and overdoses caused by prescription drugs in patients 12 and older ( Utah State Legislature ; 24-7 Press Release ). Washington Governor Creates Health Care Cabinet : On April 1 , Governor Chris Gregoire (D) announced the creation of a Health Care Cabinet to ensure that state programs operate properly under the new federal health care reform law, the Patient Protection and Affordable Health Care Act . Director of Medicaid and Assistant Secretary of the Department of Social and Health Services222 Health and Recovery Services Administration Doug Porter will lead the cabinet . The cabinet will also consolidate the purchasing of insurance by state departments and programs, starting with Medicaid and the Washington Health Care Authority (HCA), which purchases insurance for state employees and recipients of the state222s Basic Health Care Plan. The governor is also seeking a federal waiver to receive federal funding for the Basic Health Care Plan and a program for the temporarily disabled ( The Seattle Times, 4/1 ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition April 7, 2010 4/7/2010 9 Madigan Army Medical Center to Increase Troop PTSD Screening : Madigan Army Medical Center has announced that it will increase its staffing to accommodate Post Traumatic Stress Disorder (PTSD) screening of 12,000 returning veterans. In addition to filling out the Army222s standard post -deployment health assessment form, platoon leaders and sergeants will administer a mental health questionnaire to each solider under their comma nd. Finally, every soldier will meet with a mental health professional to identify those who may require additional behavioral health services. ( Seattle Post-Intelligencer, 4/6 ).