WeeklyFinancingNewsPulseStateandLocalEditionfinal20100127.pdf (PDF | 284.52 kb)
SAMHSA222s Weekly Financing News Pulse: State and Local Edition January 27, 2010 1/27/10 1 SAMHSA222s Weekly Financing News Pulse: State and Local Edition California Florida Georgia Hawaii Illinois Indiana Kansas Kentucky Missouri New York North Carolina Oregon Pennsylvania Utah Vermont Virginia 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_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 January 27, 2010 1/27/10 2 Around the States: State and Local Behavioral Health Financing New California Senate Appropriations Committee Approves Single Payer Health Care Bill : On January 21, the California Senate Appropriations Committee approved a bill ( SB 810) to create a statewide single payer health care system. The system is estimated to cost $210 billion in its first year, roughly twice the state222s entire budget but equal to federal, state, and personal spending on health care in California. If approved, the bill would cost only $1 million in the coming fiscal year, creating a commission to determine how to implement the single payer system. In addition, the commission222s recommendations would require direct voter approval prior to implementation. Because the bill was introduced last year, the full Senate must act on the legislation by January 31 ( AP via Los Angeles Times, 1/22 ; New York Times, 1/21 ; Kaiser Health News, 1/22 ). Florida Medicaid Enrollment Increasing, Program Facing Deficit : When the Florida Legislature passed the current year budget in May, the state222s Medicaid program was operating on $17.5 billion annually and serving 2.6 million enrollees; however, for the 2010 2011 fiscal year, Medicaid enrollment is expected to serve nearly three million and cost roughly $19.1 billion. Because of the increasing costs, Florida officials say that the state could face a $1.8 billion deficit in its Medicaid program from the coming fiscal year ( Daytona Beach NewsJournal, 1/24 ; Kaiser Health News, 1/25 ). Georgia State Faces Medicaid Deficit; Georgia Health Commissioner Supports Hospital Fee: Facing a $608 million Medicaid shortfall for the budget year starting July 1, Georgia Community Health Commissioner Rhode Meadows is urging the Georgia Legislature to adopt Governor Sonny Perdue222s (R) tax on health insurers and hospitals designed to raise additional Medicaid funding. Meadows notes that Medicaid enrollment is projected to increase an additional 7.7 percent between July 2009 to June 2010 ( Atlanta Journal Constitution, 1/22 ; AP via CNBC, 1/24 ; Kaiser Health News, 1/22 ). DBHDD to End Adult Mental Health Services at Milledgeville Hospital : The Georgia Department of Behavioral Health and Developmental Disabilities (DBHDD) will end adult mental health services at Central State Hospital in Milledgeville effective March 1. DBHDD began diverting new mental health patients to other facilities in November, leavingonly 30 patients currently at Central State. Though the hospital will discontinue most adult services, it will continue to serve patients with physical disabilities and correctional patients requiring maximum security facilities ( Atlanta Journal Constitution, 1/20 ; Macon.com, 1/21 ; Daily Citizen, 1/21 ). Hawaii Study Finds Under Age Drinking Cost Hawaii $188 Million in 2007 : A Pacific Institute for Research and Evaluation (PIRE) report, published November 2009 and funded by the U.S. Department of Justice222s (DOJ) Office of Juvenile Justice and Delinquency Prevention (OJJDP), found that under age drinking cost SAMHSA222s Weekly Financing News Pulse: State and Local Edition January 27, 2010 1/27/10 3 Hawaii $188 million in 2007, including medical costs, work loss, and suffering ( Honolulu Advertiser, 1/20 ). Illinois Behavioral Health Provider Receives $350,000 Federal Grant : In conjunction with Chicago School of Professional Psychology , the Community Mental Health Council Inc. (CMHC) will receive a $350,000 federal grant to pay for additional staff. The funds, which come after CMHC lost $2.3 million in state funding through state budget cuts, will allow the behavioral health center to focus on child and family services, juvenile justice, rehabilitation services, and substance abuse treatment ( Chicago Defender, 1/22 ). Indiana GOP Lawmakers Propose Legislation to Block National Health Reform Mandates : Republicans in the Indiana Legislature have proposed joint resolutions ( Senate JR 14 and House JR 6 ) calling for an amendment to the state constitution declaring that no person, employer, or health care provider may be compelled to participate in any health care system. The move, which would likely be overridden by any federal law, is aimed to prevent the individual mandate included in Democratic national health care reform bills ( HR 3590 , HR 3962 ) ( Indianapolis Business Journal, 1/20 ). Kansas Survey Finds Community Mental Health Centers Struggling : An Association of Community Health Centers (ACHC) of Kansas survey found that roughly twothirds of the state222s community mental health centers have less than three months222 operating expenses in reserves. A spokesperson for ACHC says that centers have also laid off staff, instituted furloughs, or asked employees to work without pay to reduce center expenses without limiting services. In addition, several centers have begun requiring uninsured patients to pay their bills in full prior to scheduling subsequent appointments because of cash flow problems ( Kansas Health Institute, 1/25 ). Kentucky Governor Proposes Budget Cutting Human Services, Spares Medicaid and Mental Health: On January 19, Governor Steve Beshear (D) revealed his two year budget proposal, which includes 2 percent reductions to Cabinet for Health and Family Services and relies on $780 million in expanded gambling revenue. The governor will exempt Medicaid from the 2 percent cut, calling for an additional $782 million for the program but instructing Medicaid officials to find $108 million in efficiency savings over two years. In addition, the governor222s plan would hold mental health funding constant and eliminate premiums for the state222s Children222s Health Insurance Program (CHIP) ( Lexington HeraldLeader, 1/20 ; CourierJournal, 1/19 ; CourierJournal, 1/19 ). Missouri Governor Proposes Budget, Medicaid Affected : On January 20, Governor Jay Nixon (D) proposed a $23.9 billion budget, relying on a turnaround in the state222s economy and $300 million in federal funding yet to receive congressional approval. Even with the additional funds, the governor222s budget cuts $253 SAMHSA222s Weekly Financing News Pulse: State and Local Edition January 27, 2010 1/27/10 4 million to balance the budget, including $121 million from Medicaid. However, Governor Nixon222s Administration views the cuts as cost saving efficiencies rather than services cuts. The governor222s budget asks the state222s Medicaid program to reduce heavy use of certain services, including psychotropic drugs ( Missouri Net, 1/24 ; St. Louis Post Dispatch, 1/21 ). Legislators Debate Bills to Require ASD Coverage : On January 19, Missouri lawmakers began debate on several bills that would require state regulated health insurers to cover diagnosis and therapy for autism spectrum disorders (ASDs). State regulated insurers account for roughly 40 percent of the state222s private insurance market. Though details of the bills differ, they would all require insurers to cover ASD treatment into early adulthood and set high annual caps on behavioral therapy. Autism advocates contend that such changes will increase premiums less than 1 percent but insurance companies maintain that costs would rise 2.5 to 4 percent, pricing state regulated insurers out of the market ( Kansas City Star, 1/19 ; Kaiser Health News, 1/20 ). New York UnitedHealthCare and Continuum Health Partners Debate Rates, Notification Procedures : While negotiating rates with Continuum Health Partners (CHP), a consortium of five New York hospitals including Beth Israel Medical Center and St. Luke222s Roosevelt Hospital Center, UnitedHealthCare (UHC) is also demanding that CHP notify the insurance company of patients222 admission within 24 hours. The move, which UHC has taken with hospitals in several other states, would allow UHC case managers to become involved with patient care earlier in their admissions, reducing cost and improving quality. However, UHC also wishes to impose a 50 percent reimbursement reduction for every patient CHP fails to identify within 24 hours of admission ( New York Times, 1/24 ; Kaiser Health News, 1/25 ). North Carolina DHHS to Impose New Requirements on Behavioral Health Providers : In July, the North Carolina Department of Health and Human Services (DHHS) will begin a new program, the Critical Access to Behavioral Health Agency (CABHA) program, to impose new requirements on providers receiving state or federal funds for behavioral health treatment. Under the new rules, provider organizations must obtain national accreditation, maintain a fulltime psychiatrist on staff, and take on additional administrative duties when billing Medicaid. The state has already received 200 letters of interest from providers seeking to become CABHA222s and 20 official applications ( Smoky Mountain News, 1/20 ). Update: Old Vineyard to Proceed with Psychiatric Hospital Expansion : In July, the North Carolina Division of Health Services Regulation approved the construction of a $13.8 million psychiatric emergency center at Old Vineyard Behavioral Health Services in WinstonSalem on the condition that the facility agree to receive certain clients that would otherwise go to state psychiatric hospitals. Construction on the project was put on hold after Holy Hill Hospital, which is owned by Psychiatric Solutions Inc. , filed an appeal with the state because the move would negatively affect its business. Holy Hill has dropped its appeal and Old Vineyard is proceeding with construction; however, the scheduled Summer 2011 opening is now six months delayed ( Business Journal of the Greater Triad Area, 1/22 ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition January 27, 2010 1/27/10 5 Oregon State to Replace Psychiatric Hospitals, Implement EHRs : Using $458 million allocated by the Oregon Legislature , the state will replace the Oregon State Hospital, a two campus psychiatric hospital opened in 1883 and now deemed obsolete. State funding will create two new psychiatric facilities by 2013. The first of the new facilities, to be located in Salem, will have a 620bed capacity and begin accepting patients this Fall, becoming fully operational during 2011. The second facility will be built in Junction City in 2013 and offer an additional 360 beds. In addition to funding construction of the new facilities, $25 million in state funds will implement an electronic health record (EHR) system across both new sites. The EHR funding was included because a previous federal investigation cited flawed medical record keeping at the existing facilities as an impediment to quality care ( Statesman Journal, 1/23 ). Pennsylvania Keystone Health Receives $13 Million in ARRA Funding, Some Grants Target Behavioral Health : Keystone Rural Health Center in Chambersburg has received three American Recovery and Reinvestment Act (ARRA) grants totaling $13 million. A Capitol Improvement program grant for $1.6 million will focus on behavioral health and dental service expansions, funding new behavioral health staff and increased capacity. In addition, an $11.5 million Facility Investment Program grant will allow Keystone to construct a new building, housing several existing services as well as a new urgent care center and pharmacy ( Chambersburg Public Opinion, 1/24 ). Utah Audit Finds Poor Oversight Costs Utah222s Medicaid Program $19 Million : A legislative audit of the state222s Medicaid managed care plans conducted by Milliman Inc. found that insufficient oversight cost the state up to $19 million last year. The audit found that $6 to $12 million could be saved if two providers227 Molina Healthcare Utah and Select Access227matched rates with the state222s lowest cost provider, HealthyU.Milliman also found that the state overpaid for emergency room care by $7 million in 2009. Auditors note that the problem began in 2002 when Utah stopped paying the plans222 fixed rates per member per month and agreed to reimburse them for the full cost of services plus an administrative fee. The auditors conclude that Utah should return the managed care plans to fixed pricing and suggest several methods to reduce ER expenses ( Salt Lake Tribune, 1/19 ; Desert News, 1/20 ). Poll Shows Utah Residents Want Option to Opt Out of Health Reform, GOP Legislators Pursue Legislation : A Salt Lake City Tribune poll shows that the majority of Utah residents believe that the state should be able to opt out of any federal health care reform initiative. Meanwhile, state GOP legislators have introduced a bill that would bar state agencies from implementing any new federal laws without prior approval from the Utah Legislature ( Salt Lake City Tribune, 1/26 ; Kaiser Health News, 1/26 ). Vermont Governor Proposes Budget Cutting $53 Million from Human Services : Facing a projected $153 million revenue shortfall for the coming fiscal year, Governor Jim Douglas (R) proposed a budget that would reduce human services spending by $53 million, cutting Medicaid spending by imposing utilization caps for certain services. Under the governor222s plan, the Vermont Health Access Program and Dr. Dynasaur, SAMHSA222s Weekly Financing News Pulse: State and Local Edition January 27, 2010 1/27/10 6 the state222s CHIP, would also charge higher monthly premiums beginning in 2011 ( Burlington Free Press, 1/20 ; Time Argus, 1/24 ; Addison County Independent, 1/25 ). Legislature Considering Legislation to Lower Drinking Age and Seek Federal Waiver for Transportation Funding: A Vermont House panel heard testimony on two bills, one lowering the state222s drinking age from 21 to 18 and another asking the state222s congressional delegation to seek federal waivers allowing the state to receive 100 percent of its transportation funding after altering its drinking age. In 1984, the National Minimum Drinking Age Act mandated that states raise their legal drinking age to 21 or lose 10 percent of their annual transportation funding. Enacting the change without a federal waiver would cost Vermont roughly $17.5 million in federal transportation funds ( AP via Washington Post, 1/21 ; Kaiser Health News, 1/25 ). Virginia Senator Introduces Bill to Privatize Liquor Sales, May Affect DBHDS Funding: A bill ( SB 443) introduced by State Senator Mark Obenshain (R) would force the Virginia Department of Alcohol and Beverage Control (ABC) to close its operations and auction its liquor licenses to private vendors. ABC liquor sales generated $322 million last year, $75 million of which funded the Virginia Department of Behavioral Health and Developmental Services (DBHDS). Obenshain notes that the state would continue to tax liquor and that the ABC could recoup the difference in revenue through the sale of the liquor licenses. The bill is currently under consideration by the Senate Finance Committee ( Richmond BizSense, 1/26 ). Bills to Block Individual Health Care Mandate Advance in Senate : On January 25, the Senate Commerce and Labor Committee approved legislation ( SB 283, SB 311, and SB 417) stating that no individual in Virginia may be forced to purchase health insurance.The bills, which are designed to combat a potential individual mandate within Democratic national health care reform, received support from two Democrats in committee and now head to the Senate floor. Critics of the bills argue that any federal mandate would override a state law, rendering the state legislation useless ( Roanoke Times, 1/26 ; Kaiser Health News, 1/26 ). Washington Legislature Rejects Marijuana Legalization, Loses Potential Funding Source : On January 20, the Washington House Public Safety Committee rejected a bill that would have legalized marijuana possession. The legalization bill would have imposed a 15 percent marijuana sales tax to finance treatment and prevention efforts. The committee chair noted that he voted against the legalization measure because it would conflict with federal law. The same day, the committee also rejected a bill to decriminalize marijuana possession ( AP via Seattle Times, 1/20 ; Join Together, 1/22 ). West Virginia Update: DHHR to Revisit Estimates of State222s Costs Under National Health Reform : Last week, the West Virginia Department of Health and Human Resources (DHHR) released estimates that the House and Senate health care reform bills ( HR 3962 , HR 3950 ) would cost the state $725 million and $147 million respectively by 2019. DHHR officials are now agreeing to revisit their estimates after drawing SAMHSA222s Weekly Financing News Pulse: State and Local Edition January 27, 2010 1/27/10 7 significant skepticism from state lawmakers. The DHHR estimates assume that as many as 193,000 residents would be eligible for Medicaid under the federal expansions but U.S. Census Bureau data indicate that only 88,000 to 105,000 residents would be newly eligible. In addition, DHHR estimated the average per person cost for Medicaid at $501 though the West Virginia average is actually $308 ( Charleston Daily Mail, 1/20 ; Charleston Gazette, 1/19 ). Mercer County Hospital Expands Behavioral Health Unit : The Princeton Community Hospital in Mercer County is expanding its 24 bed behavioral health unit. The expansion will create an additional facility with 30 geriatric slots, 24 adult slots, and 10 slots dedicated to intensive care patients ( WVNS, 1/20 ). Wisconsin Governor Proposes BadgerCare Plus Basic as Stopgap Program for the Uninsured : Governor Jim Doyle (D) has officially proposed a new program, BadgerCare Plus Basic, to provide limited coverage for uninsured childless adults currently on the waiting list for state222s BadgerCare Plus program and earning up to 200 percent of the federal poverty level (FPL). BadgerCare Plus Basic would cover catastrophic events, 10 doctors visits per year, five ER visits per year, limited hospitalizations, some generic medications, and enrollment in a prescription drug discount plan, all with limited copayments.The state would fund the new program through a $1 million federal grant and a $130 monthly premium paid by program enrollees. The program requires approval by the Wisconsin Legislature but will require no state funds ( Milwaukee JournalSentinel, 1/21 ; Kaiser Health News, 1/22 ). New Behavioral Health Facility to Open in La Crosse: A new 8 bed short term behavioral health facility is scheduled to open in La Crosse in March. The new facility will offer mental health and detoxification services to patients without other medical needs, providing an alternative to hospital based care ( WKBT, 1/22 ).
