WeeklyFinancingNewsPulseStateandLocalEditionfinal20100217.pdf (PDF | 328.70 kb)
SAMHSA222s Weekly Financing News Pulse: State and Local Edition February 17, 2010 2/17/10 1 SAMHSA222s Weekly Financing News Pulse: State and Local Edition Arkansas California Colorado Florida Georgia Idaho Iowa Kansas Louisiana Maine Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska New Hampshire New Jersey New Mexico North Carolina Ohio Pennsylvania Texas Utah Washington Wisconsin Wyoming 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_subscr ibe.html?code=USSAMHSA&origin=http://www.samhsa.go v/enetwork/success.aspx For questions or comments, please contact Kevin Hennessy ( kevin.hennessy@samhsa.hhs.gov ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition February 17, 2010 2/17/10 2 National Edition Update APA Proposals for DSM 5 Affect Mental Health and Substance Use Diagnoses: On February 10, the American Psychiatric Association (APA) unveiled proposed changes to the current Diagnostic and Statistical Manual for Mental Disorders (DSM) IV, which researchers, clinicians, and insurers use to make diagnostic, treatment, and coverage decisions. The draft revisions are open for public comment until April 30 and the APA will publish the final DSM V in 2013. The APA222s proposals would create a new category of 223risk224 disorders for people demonstrating early signs of some mental health conditions; create an overarching category of autism spectrum disorders (ASDs) to encompass autism and related conditions; and alter the diagnosis for childhood bipolar disorder. The proposed changes also move towards 223dimensional assessments224 of mental disorders227replacing strict categories with continuums of cross cutting symptoms that allow for degrees of illness.The APA has also proposed eliminating the diagnoses 223substance abuse224 and 223substance dependence,224 creating a new category of 223addiction and related disorders224 to include substance specific use disorders. The diagnostic criteria for the use disorders would remain quite similar to those in the DSM IV; however, the APA proposes adding 223drug craving224 and eliminating 223problems with law enforcement.224 In addition, the proposed changes would characterize 223normal224 responses to drug withdrawal227including caffeine withdrawal227as 223miscellaneous discontinuation syndrome,224 clarifying the distinction between dependence and the compulsive drug seeking behavior of addiction. Finally, the APA also proposed creating a new category of 223behavioral addictions224 which, at this point, includes only gambling addiction and excludes both sex and internet addictions ( BusinessWeek, 2/10 ; Wall Street Journal, 2/10 ; APA, 2/10 ; USA Today, 2/9 ; Kaiser Health News, 2/10 ; Join Together, 2/12 ). Around the States: State and Local Behavioral Health Financing News Arkansas DHS Director Says State Medicaid Program Faces $400 Million Deficit, Recommends Program Reductions: In a Joint Budget Committee meeting on February 16, Arkansas Department of Human Services (DHS) Director John Selig said that the state faces a projected $400 million Medicaid deficit for the coming fiscal year. Seligrecommended closing the gap by reducing programs and taking fewer new clients ( Arkansas News, 2/16 ). Eli Lilly to Pay $18.5 Million to Settle Medicaid Fraud Suit : On February 16, Arkansas Attorney General Dustin McDaniel announced that Arkansas will receive $18.5 million from Eli Lilly & Co. to settle claims that the company illegally marketed its antipsychotic drug, Zyprexa. Under the terms of the deal, Eli Lilly will not admit wrongdoing.Arkansas is one of 13 states to sue Eli Lilly over Zyprexa and suits are still pending in Louisiana, Minnesota, Montana, and Pennsylvania. The pharmaceutical company already paid out $1.4 billion in January 2009 to settle federal charges over Zyprexa marketing between 1999 and 2001 ( Office of the Attorney General via Arkansas Times, 2/16 ). California Update: Anthem Reaches Deal with State Regulators to Postpone Planned Premium Increases: After Anthem Blue Cross of California announced plans to increase premiums for its individual policyholders SAMHSA222s Weekly Financing News Pulse: State and Local Edition February 17, 2010 2/17/10 3 by as much as 39 percent on March 1, the company reached an agreement with California Department of Insurance (DOI) to postpone the cuts until May 1. The postponement will allow the DOI to obtain outside experts to review Anthem222s detailed plan filing. Anthem, a subsidiary of WellPoint Inc. , will also be the target of committee hearings in the U.S. Congress on February 24 ( AP, 2/14 ). Senate Budget Committee Approves Portion of State Budget, Cuts Prison Health Care : On February 10, the California Senate Budget Committee approved legislation to cut prison health care spending by $811 million, or 40 percent. The same bill would also cut employee payrolls by 5 percent to save $580 million and reduce local aid by $230 million ( Los Angeles Times, 2/11 ; Kaiser Health News, 2/11 ). State Owes $51.8 Billion for Retiree Health Care: California State Controller John Chiang reported to the California Legislature on February 9 that the state is obligated to pay $51.8 billion to the California Public Employees222 Retirement System for retiree health and dental benefits. Chiang recommends increasing the annual payments to earn interest on the amounts set aside for future benefits, rather than proceeding with the currently structured 223payasyou go224 policy ( Central Valley Business News, 2/9 ). Colorado Governor and Democratic Legislators Propose Health Care Reform Package : On February 11, Governor Bill Ritter (D) and several Democratic legislators announced a state health care reform package including 10 bills and an executive order. Governor Ritter222s executive order forces the state222s Medicaid program, the governor222s information technology office, and the Colorado Departments of Revenue and Health to share information to streamline the Medicaid application process. The 10 proposed bills would prohibit gender discrimination in health care plans; require insurers to provide policy information in 223plain English224; provide incentives for nurses and doctors to work in rural and underserved communities; streamline Medicaid administration and more aggressively investigate potential fraud; and create an online database to allow residents to compare physicians222 patient outcomes ( Denver Post, 2/12 ). Florida Governor Open to Expanding Medicaid Reform Pilot : Reversing his previous position, Governor Charlie Crist (R) said that he is open to expanding the state222s Medicaid reform pilot project initially started under Former Governor Jeb Bush (R). The project currently operates in Baker, Broward, Clay, Duval, and Nassau counties,enrolling Medicaid beneficiaries in private managed care plans rather than the state222s traditional fee forservice (FFS) Medicaid plan.Preliminary studies have shown that the pilot saves the state money but have not assessed the pilot222s effects on access to care or outcomes. The Centers for Medicare & Medicaid Services (CMS) approved the funding for the pilot under a waiver that includes $1 billion in extra health care funding for Florida through a Low Income Pool (LIP) program that expires next year. The state may seek a three year waiver renewal, continuing both the pilot and the increased funding; however, to expand or alter the pilot, the state faces a more lengthy approval process ( Health News Florida, 2/10 ; Kaiser Health News, 2/11 ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition February 17, 2010 2/17/10 4 Georgia DBHDD Hires Consultant to Improve Mental Health System, Avoid Federal Takeover : Stemming from U.S. Department of Justice (DOJ) investigation of Georgia222s mental hospitals, the Georgia Department of Behavioral Health and Developmental Disabilities (DBHDD) hired an independent consultant to help improve the state222s mental health system and avoid a costly federal takeover. DBHDD will pay Dr. Nirbhay Singh and his associates up to $3.5 million for one year of consulting and training services beginning October 2009. DBHDD also retains the option to extend Dr. Singh222s contract for several years. The DOJ has already requested an independent overseer for the state222s mental health services ( Macon Telegraph, 2/15 ; Georgia Public Broadcast, 2/15 ). Senate Panel Approves Modified House Budget, Mental Health Funding Unaffected: The Georgia Senate Appropriations Committee approved a $17.4 billion budget for the current fiscal year ending June 30, modifying the version passed by the Georgia House on February 11. Both budgets cut current year spending by roughly $1.15 billion; however, the Senate version eliminates $14.5 million that the House allocates for payments to private hospitals. The Senate plans to allocate the funding for fiscal year beginning July 1. In addition, both bills preserve Governor Sonny Perdue222s (R) proposed $2.2 million funding increase for state mental hospitals.After approval from the full Senate, legislators for both houses must negotiate a compromise budget bill ( Atlanta Journal Constitution, 2/16 ; Atlanta Journal Constitution, 2/11 ). Idaho DOC Blocks Mental Health Facility Construction : The Idaho Department of Corrections (DOC) blocked the construction of a planned $50 million secure mental health facility with 300 beds, slated to break ground later this year. The DOC will evaluate the facility, designed to treat state civil commitment patients, to re evaluate workforce planning and the economic impacts of managing the facility ( CNBC, 2/16 ). Iowa House Removes Mental Health Changes from Government Reorganization Bill : On February 12, the Iowa House approved an amendment to a bill ( SF 2088 ) reorganizing the state government, eliminating all provisions relating to mental health institutions. SF 2088 previously contained language to force the closure of mental health facilities and alter the delivery of mental health services in the state ( Clarinda HeraldJournal, 2/13 ). Kansas Update: House Passes Bill Cutting Medicaid Reimbursement Rates : The Kansas House passed HB 2222 to reduce Medicaid provider reimbursement rates by 10 percent and cut elected officials222 pay by 5 percent. Governor Mark Parkinson (D) proposed the Medicaid cuts in November in an effort to save $22 million and the Kansas Senate passed a similar measure on January 27. A conference committee will now resolve the differences between the House and Senate bills ( Wichita Eagle, 2/11 ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition February 17, 2010 2/17/10 5 Louisiana Governor Jindal Proposes Budget, Medicaid and Mental Health Funding Cut : On February 12, Governor Bobby Jindal (R) proposed a $24.2 billion operating budget for FY201011, 18 percent less than the current year budget. Governor Jindal222s budget cuts $300 million from Medicaid, including a 3.1 percent reimbursement reduction for hospitals, physicians, and other health care providers. The governor222s budget also contains reduced funding for mental health hospitals because of reductions in Louisiana222s Federal Medical Assistance Percentage (FMAP). The state will lose $42.9 million in federal funding for mental health institutions but will provide $30.9 million to alleviate some of the funding gap. In addition, Governor Jindal222s budget seeks to shift the state222s mental health system from state run institutional care facilities to community based care and private partnerships ( Times Picayune, 2/10 ; AP, 2/13 ; The Advocate, 2/13 ; Office of the Governor via Bayou Buzz, 2/12 ; Times Picayune, 2/12 ; Kaiser Health News, 2/12 ). Maine House Committee Approves Bill to Expand Access to Prescription Drug Database: The Maine House Health and Human Services Committee approved a bill February 12 to allow the Office of the Chief Medical Examiner and MaineCare employees to access the state222s prescription drug database. Under the proposed bill, the medical examiner could use the database to help determine cause of death. The legislation would permit MaineCare employees to use the database to determine if living Medicaid beneficiaries are abusing prescription drugs and then use that information to restrict those individuals from purchasing drugs ( Portland Press Herald via iStockAnalyst, 2/12 ). Massachusetts Governor Introduces Bill to Obtain Greater Authority Over Health Care Rates; Instructs Regulators to Scrutinize Small Group Plans : Governor Deval Patrick (D) introduced a bill that would give the Massachusetts Insurance Commissioner broad authority to regulate health care rates for providers and insurers. Under the proposed bill, rates that health providers charge insurers would be presumptively disapproved if they increase faster than the level of medical inflation. In addition, premium increases in excess of 1.5 times the level of medical inflation for plans with fewer than 50 employees would also be considered excessive and subject to rejection by the state. Finally, the legislation would prevent the Massachusetts Legislature from imposing new benefit mandates on state health insurers for two years. In addition to seeking legislative approval for broader state authority, Governor Patrick instructed health insurers to submit proposed small group rate increases 30 days prior to implementation for state review. The order will utilize a current state law allowing the state to reject certain increases in small group rates ( Boston Globe, 2/11 ; Kaiser Health News, 2/11 ). Michigan Governor Proposed Budget, Medicaid Affected : On February 11, Governor Jennifer Granholm222s (D) proposed a $47.09 billion FY2011 budget designed to close the state222s projected $1.5 billion deficit. In addition to continuing an 8 percent Medicaid reimbursement cut implemented this year, the governor222s budget would implement a 3 percent tax on physician222s gross receipts to draw down $500 million in federal Medicaid matching funds. Without the physician tax, Governor Granholm222s budget would SAMHSA222s Weekly Financing News Pulse: State and Local Edition February 17, 2010 2/17/10 6 reduce Medicaid provider reimbursements by an additional 11 percent. The governor222s budget also assumes an additional $514 million in extended American Recovery and Reinvestment Act (ARRA) Medicaid funding ( Detroit Free Press, 2/12 ; Modern Healthcare, 2/12 ; Detroit News, 2/11 ). Minnesota Governor Proposes Cuts, Reduces MinnesotaCare Eligibility : On February 15, Governor Tim Pawlenty (R) proposed a series of cuts to close the state222s projected $1.2 billion deficit. The governor proposed reducing health and human services funding by $347 million, including eliminating MinnesotaCare eligibility for childless adults earning over $8,100 annually. Governor Pawlenty222s proposal also reallocates $47 million from the state222s Health Care Access Fund, which traditionally finances MinnesotaCare, to the state222s general fund ( Minneapolis Star Tribune, 2/15 ; Minnesota Public Radio, 2/15 ; Kaiser Health News, 2/16 ). State Sues Health Discount Companies for Defrauding Consumers : In a lawsuit filed February 10, Minnesota Attorney General Lori Swanson alleged that two companies offering health discount plans misrepresented their products as insurance policies, causing over 4,600 Minnesotans to lose millions of dollars.Neither of the companies, Direct Medical Network Solutions Inc. or TX and Association Healthcare management Inc., is licensed to sell insurance in Minnesota. The products sold by these firms do not provide financial protection for health services; instead, they provide discounts at a limited number of health care providers ( The Washington Post, 2/10 ; The Star Tribune, 2/10 ). Mississippi Governor Signs Law Banning OTC Sale of Pseudoephedrine: Governor Haley Barbour (R) signed HB 512, designating pseudoephedrine a controlled substance effective July 1. The new law will prohibit over the counter (OTC) sale of any product containing the nasal decongestant, which is also a key ingredient in methamphetamine. Though many states control the OTC distribution of pseudoephedrine, Oregon is the only other state to require a prescription for the drug ( Clarion Ledger, 2/11 ; Kaiser Health News, 2/12 ). Missouri Update: House Passes Bill to Drug Test Welfare Beneficiaries: The Missouri House passed a bill ( HB 1377 ) that would require the Missouri Department of Social Services to drug test Temporary Assistance for Needy Families (TANF) recipients. The legislation would require roughly 30,000 residents to go through drug screening and prevent TANF recipients from receiving funds if they test positive for drugs. Though the exact cost of the bill is unknown, the $55 tests are expected to cost the state $3.6 million in FY2012 and $3.7 million in FY2013 ( Maneater, 2/12 ). DMH Awards Communities of Hope Grants to Develop Behavioral Health Plans: The Missouri Department of Mental Health (DMH) awarded eight Communities of Hope grants to assist 21 community coalitions in determining local priority for behavioral health needs and developing plans to address those issues. Funding for the grantscomes from the Federal Mental Health Transformation SAMHSA222s Weekly Financing News Pulse: State and Local Edition February 17, 2010 2/17/10 7 Grant initiative. Among other awardees, DMH awarded $30,000 to the St. Joseph Youth Alliance ( News Press/St. Joe Now, 2/14 ). Montana Supreme Court Justice Seeks Ballot Initiative to Direct Alcohol Tax Revenue to Treatment and Prevention : Montana Supreme Court Justice Mike McGrath proposed the Montana Alcohol Abuse and Drug Free Plan to the Montana Law and Justice Interim Committee on February 9. If approved, the measure would direct $5 million of the state222s $36 million annual alcohol tax revenue to substance use treatment and prevention. Justice McGrath filed the ballot initiative with Montana222s Office of the Secretary of State but must get 24,337 signatures to place the measure on the November ballot ( KFBB, 2/9 ; Join Together, 2/12 ). Nebraska Bill Seeks to Limit Prescription Drug Copayments: A bill in the Nebraska Senate , LB 1017 , introduced by State Senator Abbie Cornett (R) would restrict copayments on the most expensive prescription drugs by changing the rules governing higher 223tier224 drugs. The bill would eliminate price 223tiers224 that base copayments on prescription costs, exceed the insurer222s cost, or exceed the cost of the lowest prescription copayment in the plan by 500 percent. The bill would also require that prescription copayments count towards plan222s out of pocket limits or that plans cap out of pocket drug costs at $1,000 per individual or $2,000 per family. Representatives of Blue Cross and Blue Shield of Nebraska (BCBS) and United Healthcare reported that they are still evaluating the legislation222s potential impact, but BCBS indicated that the bill could shift the majority of the burden onto other policyholders. ( CNBC, 2/15 ) New Hampshire Governor Asks State Agencies to Identify Additional Budget Cuts : Looking to eliminate a projected $140 million shortfall through June 2011, Governor John Lynch (D) is asking state agencies to reduce current year spending by 2 percent and plan for 8 percent reductions next year. For the New Hampshire Department of Health and Human Services (DHHS), the spending reduction will come on top of the planned $43 million cut partially outlined on February 5 ( AP via Boston Globe, 2/11 ). New Jersey Governor Invokes Executive Power to Make Significant Budget Cuts in Health, Education, Social Services : To combat a $2.2 billion deficit, Governor Chris Christie (R) detailed his plans to use executive orders and statutory authority to cut health care ($25 million), public and higher education ($537 million), and transportation funding ($32.7 million). In addition, the governor plans to freeze $1.5 billion in current spending and eliminate a $58 million jobs creation program. ( Philadelphia Inquirer, 2/12 ; New Jersey Real Time News, 2/12 ). New Mexico House Rejects Bill Allowing Judges to Sentence Drug Offenders to Treatment : On February 12, the New Mexico House rejected the Substance Abuse and Crime Prevention Act ( HB 178 ) that would have SAMHSA222s Weekly Financing News Pulse: State and Local Edition February 17, 2010 2/17/10 8 allowed judges to sentence drug involved offenders to substance abuse treatment rather than jail. Under the rejected bill, the offender would pay for treatment and the state could pursue charges if the offender failed to complete treatment. Proponents of the bill argue that it would have saved New Mexico $22 million annually ( AP via PennLive, 2/12 ). CMS to Investigate State Medicaid Fraud Allegations : In its 2009 Annual Report, the New Mexico Attorney General222s Medicaid Fraud and Elder Abuse Division accused the New Mexico Departments of Human Services and Health of withholding documentation and doctoring information requested by investigators regarding the state222s $1 billion Medicaidprogram. The CMS Medicaid Integrity Group plans to investigate the reports of noncompliance, failure to screen Medicaid providers for criminal convictions, and lack of verification of health care services received by patients ( The Independent, 2/10 ). North Carolina Audit Finds DOC Overpays for Inmate Health Care : The State Auditor222s Office found that the North Carolina Department of Corrections (DOC) pays an average of 467 percent more for health care services than Medicare/Medicaid would pay. The audit attributes the costs to poorly written contracts with health care service providers. Last year, the DOC spent $231 million on inmate health care, with $90 million going to outside providers. A bill in the North Carolina Legislature last year sought to lower inmate health care spending by requiring BlueCross BlueShield of North Carolina to charge the same rate for inmates222 health care as for state employees; however, the bill was weakened before implementation ( WRAL, 2/11 ; NBC via MyNC.com, 2/11 ; News Observer, 2/15 ; Kaiser Health News, 2/16 ). Ohio Licking County Behavioral Health Board Seeks Additional Levy: The Licking County Community Mental Health and Recovery Board has approved a ballot measure for the May primary seeking an additional .45 mill levy on property owners to generate $1.6 annually for mental health and substance use services. Behavioral health services are financed by an existing levy; however, a spokesperson for the Board says that, if the additional levy does not pass in May, the board will be forced to make behavioral health service cuts ( Lancaster Eagle Gazette, 2/11 ). Pennsylvania Governor Proposes Budget, Medicaid Affected : On February 9, Governor Ed Rendell (D) unveiled his proposed $29 billion budget that would increase spending by 4.1 percent over current year levels, partially due to an assumed continuationof ARRA funding. In addition to several tax changes, Governor Rendell222s budget cuts hospital Medicaid payments by $31.9 million, potentially eliminating $73.4 million in federal matching funds ( Philadelphia Inquirer, 2/10 ; Insurance & Financial Advisor, 2/10 ). Texas HHS Commissioner Proposes 5 Percent Cuts, Medicaid and Mental Health Affected : Complying with a January directive from Governor Rick Perry (R), Lt. Governor David Dewhurst (R), and House Speaker Joe Straus (R) to cut most state agency budgets by 5 percent, Texas Health and Human Services (HHS) SAMHSA222s Weekly Financing News Pulse: State and Local Edition February 17, 2010 2/17/10 9 Commissioner Tom Suehs proposed $304 million in budget cuts. The HHS cuts include a proposed 1 percent Medicaid reimbursement reduction for most doctors and hospitals and a 2 percent reduction for caregivers, including those treating the mentally ill. The HHS budget would also eliminate up to 200 beds from 11 state psychiatric hospitals ( Dallas Morning News, 2/11 ; WEAN, 2/11 ; Star Telegram, 2/15 ). Utah State Audit Finds Children Mistakenly Enrolled in CHIP : A recent state audit found that $23.7 cents of every dollar expended in Utah222s Children222s Health Insurance Program (CHIP) went to ineligible recipients. However, the audit also found that most ineligible CHIP beneficiaries were eligible for Medicaid and enrolled in CHIP in error. In addition, the audit found that 30 percent of Medicaid enrollees do not meet eligibility requirements or have incomplete intake documents ( Deseret News, 2/10 ). Washington Update: Walgreens Postpones Planned Withdrawal from Medicaid : On February 12, Walgreen Co. announced that it will postpone its planned withdrawal from Washington222s Medicaid program until March 15 because of constructive talks with state officials. Last month, Walgreen Co. announced plans to withdraw 64 of its 121 pharmacies from Medicaid unless the state raised its brand name reimbursement rate. The 64 pharmacies represent 75 percent of the company222s Medicaid business in the state ( Reuters, 2/12 ). Wisconsin Racine County Board Approves New Behavioral Health Assessment Center : The Racine County Board unanimously approved a County Human Services Department behavioral health assessment center slated to open this Spring. The new facility will address treatment gaps identified in a 2007 report, providing services to medically stable individuals in crisis that pose no risk to themselves or others. The Human Services Department already included the facility in its FY2010 budget ( Journal Times, 2/11 ). Wyoming Senate Committee Approves Health Reform Pilot : On February 12, a Wyoming Senate committee approved a bill ( SF 61 ) to create a health care reform pilot program that failed in Wyoming Legislature in 2009 and 2008. SF 61, which is sponsored by State Senator Charles Scott (R), would enroll 500 residents earning up to 250 percent of the federal poverty level (FPL) in a pilot program using individual contributions and $750,000 in state funds to create health savings accounts (HSAs). Individuals would use their HSAs to pay for health insurance and out of pocket expenses.The pilot would incentivize the use of primary rather than specialist care; however, it would not include the 223medical home224 concept included in previously rejected versions of the bill. In addition, by utilizing HSAs, the pilot will give people a financial stake in their health care, and allow them to retain the balance of their accounts when they leave the program ( AP via CNBC, 2/11 ; Wyoming Tribune Eagle, 2/13 ).
