SAMHSA222s Weekly Financing News Pulse: State and Local Edition June 9, 2010 6/9/2010 1 SAMHSA222s Weekly Financing News Pulse: State and Local Edition Alaska Arizona California Georgia Iowa Illinois Kentucky Louisiana Maryland Massachusetts Mississippi Missouri Montana New Mexico New York Oklahoma Pennsylvania South Carolina Ver mont 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 June 9, 2010 6/9/2010 2 Around the States: State and Local Behavioral Health Financing New s Alaska Governor Signs $8 Billion Operating Budget, Vetoes Funding to Expand CHIP: On June 7, Governor Sean Parnell (R) signed an $8 billion state operating budget. Governor Parnell vetoed $2.9 million in funding that would have expan ded the state222s Children222s Health Insurance Program (CHIP), Denali KidCare , because the program finances abortions ( Alaska Dispatch, 6/3 ). Arizona Federal Home Loan Bank of San Francisco Awards Amity Foundation $1 Million Family Substance Abuse Treatment Grant : The Federal Home Loan Bank of San Francisco , a privately owned bank, awarded the Amity Foundation a $1 million grant to build a new family substance abuse treatment facility at the foundation222s ranch in Tucson. The new facility will house 100 families annually ( United Press International, 6/8 ). California Assembly Approves Bill Mandating Full M/SU Parity ; Legislature Approves Health Insurance Bills: On June 1, the California Assembly approved legislation ( AB 1600) that would require all insurers to cover mental health and substance abuse treatment on an equal basis with general health care. The bill now goes before the California Senate . The same day, the Senate approved legislation ( SB 890) which requires insur ers to standardize plan information to allow for easier consumer comparisons . Also on June 1, the Senate and Assembly passed bills ( SB 900 and AB 1602) that outline initial steps for creating an insurance exchange, as required by the national health care reform law. Finally, on June 2 , the Assembly approved bills that would require insurers to obtain state approval for premium increases ( AB 2578) and coverage cancellations (AB 2470) . Both bills now go before the Senate ( San Jose Mercury News, 6/4 ; San Jose Mercury News, 6/3 ; Kaiser Health News, 6/4 ). Poll Finds Most Californians Support National Health Care Reform Law: A poll conducted by Field Poll found that 52 percent of Californians s upport the national health care reform law. Respondents were evenly split on whether the law would help control rising health care costs. The poll also found that 40 percent of Californians believe the law will weaken the economy while 30 percent believe the law will strengthen it. Finally, the poll found that 58 percent believe the law is an 223important first step but many more changes still need to be made224 ( AP via San Jose Mercury News, 6/3 ; Kaiser Health News, 6/3 ). San Joaquin County Opens Detoxification Center : On June 7, San Joaquin County opened a four -bed detoxificatio n program funded through state, county, and federal funds. The county will charge $240 daily for live -in detoxification services . County officials hope the program will enable more individuals to enroll in the county222s residential treatment program, whic h will only accept patients that have undergone detoxification ( Stockton Record, 6/7 ). San Francisco Mayor Proposes Budget with M/SU Cuts : On June 1, Mayor Gavin Newsom (D) proposed a $6.48 billion budget for the fiscal year beginning July 1 , cut ting funding for mental health and SAMHSA222s Weekly Financing News Pulse: State and Local Edition June 9, 2010 6/9/2010 3 substance abuse treatment by $6 million. The budget also cuts the San Francisco Department of Public Health and San Francisco Department of Human Services budgets by $22.1 million and $10.6 million, respectively. The mayor222s proposed budget fully funds the Healthy San Francisco program, which provides care to uninsured city residents that are not eligible for Medicaid ( KTVU, 6/1 ; San Francisco Chronicle, 6/2 ). Georgia Governor Signs Bill Blocking Individu al Insurance Mandate : On June 2, Governor Sonny Perdue (R) signed a bill ( SB 411) barring laws that require individual s to participate in a health plan. The measure is designed to challenge the individual insurance mandate contained within the national health care reform law ( Rome News - Tribune, 6/4 ) . Liberty County Commissioners Award $3,000 to Two Drug Abuse Prevention Programs : On June 1, the Liberty County Commissioners voted to award two youth programs, Save Our Children and Scott222s All- Stars , $3,000 each to fund drug abuse prevention programming. Save Our Children is an educational program seeking to reduce drug use by youth ages 13 to 18 and Scotts All -Stars is a basketball program for fourth -graders that incorporates drug abuse prevention education into its curriculum . The funds come from the county222s Drug Abuse Treatment and Education Fund ( Coastal Courier, 6/4 ). Iowa State to Discontinue Some Smoking Cessation Tools Due to Budget Constraints : On June 1, Iowa Department of Public Health (DPH) officials announced that the depa rtment will stop offering free samples of nicotine patches and gum on June 30. DPH222s Quitline Iowa program currently offers two - week samples of the nicotine replacement products. Quitline will stop offering the samples because its budget is declining fro m $1.6 million in the current fiscal year to $840,500 in the fiscal year begin ning July 1 ( Des Mo ines Register, 6/2 ; Kaiser Health News, 6/2 ). Illinois Facing Delinquent State Payment, Adams County Eliminates Public Health Programs: On June 3, Adams County officials announced that the county would eliminate several public health programs for which it has not received appropriate state funding. By June 30, the state will owe the Adams County Health Department $900,000. The county p lans to eliminate Healthy Child Care, Healthworks, Illinois Family Violence, Teen Pregnancy Prevention, Teen Reach, the Illinois Breast and Cervical Cancer Program, and the Vision and Hearing Screening programs ( Chicago Tribune, 6/3 ). Kentucky Governor Signs $17 Billion Budget, Makes Vetoes Affecting Health Care : On June 7, Governor Steve Beshear (D) signed a $17 billion budget , veto ing several provisions af fecting health care. The governor removed language from the bill that would have protected certain Medicaid programs, mental health departments, and local health departments from future budget cuts. The governor also eliminated a study to determine whether to expand Louisville222s Medicaid managed care program ( The Richmond Register, 6/5 ; Lexington Herald-Leader, 6/5 ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition June 9, 2010 6/9/2010 4 Louisiana Update: House Approves $25 Billion Budget with Health Care Cuts : On June 4, the Louisiana House approved a $25 billion budget containing $68 million in cuts to the state222s public hospital system run by Louisiana State University (LSU) . Legislators also left $65 million in cuts to the discretion of Governor Bobby Jindal (R). The budget now goes before the Louisiana Senate ( The Advocate, 6/5 ). Senate Approves Numerous Bills Affecting Health Care Financing : On June 2, the Louisiana Senate approved a package of bills governing the management of state finances that impac t health care financing. One measure would change the rules governing the state222s 223rainy day fund , 224 allow ing the state to utilize the funds in years where Louisiana sustains a loss in federal Medicaid funding. Currently , the state may only use the fund w hen state revenue is lower than in the previous year. Another measure in the package would redirect some of the state222s tobacco -settlement funds to provide an additional $30 million for health care program ming annually. The package now goes before the Lo uisiana House ( Times -Picayune, 6/2 ). State Submits Federal Request to Use Medicaid Funds for Primary Care Clinic Network : State officials submitted an application for a federal waiver to use Medicaid funds to continue operati ng the primary care clinic network established after Hurricane Katrina. The network began in 2007 with a federal Primary Care Access and Stabilization grant that provided $30 million annually. However, the grant funding ends September 30 and s tate officials are proposing redirect ing $20 million annually in Medicaid Disproportionate Share Hospital funds to the primary care clinic network. Under the proposed program, t he state would require clinics to meet best -practice standards for primary care 223medical homes224 and continue to use the Louisiana Public Health Initiative (LPHI) as a third -party manager for the network. If approved, the program would provide clinic care for individuals earning below 133 percent of the federal poverty level (FPL) at no cost and individuals earning between 133 percent and 250 percent of the FPL would pay for services on a sliding scale. There are currently over 90 clinics in the network operated by 25 organizations and offering primary care, obstetrics, mental health services, dental care, and school clinics. Half of the patients using the system are uninsured and approximately 25 percent are enrolled in Medicaid ( Times -Picayune, 6/2 ). Maryland CareFirst BCBS to B egin Incentive Program to Encourage Physician s to Cut Costs : On January 1, CareFirst BlueCross BlueShield (BCBS) plans to begin a program offering physicians bonuses for reducing costs while maintaining quality of care. Under the program, participating physician groups and CareFirst officials will p roject patients222 health costs for the upcoming year using previous claims. Groups of physicians that reduce costs while maintaining a high quality of care will be eligible for bonuses of up to 80 percent of their negotiated reimbursement rates from CareFirst . The program will be open to practices of five to 20 physicians. Practices of less than five physicians may partner with others to participate, while practices of more than 20 may divide into groups. In addition, CareFirst will offer all participating physicians an automatic double-digit reimbursement rate increase. The Maryland Health Care Commission must approve the plan before it can begin. CareFirst plans to recruit physicians in SAMHSA222s Weekly Financing News Pulse: State and Local Edition June 9, 2010 6/9/2010 5 Maryland, the District of Columbia, and Nort hern Virginia to participate ( Baltimore Business Journal, 6/4 ; Kaiser Health News, 6/4 ). Massachusetts Governor Update s Proposed Budget to Reflect Uncertainty of ARRA FMAP Funds : On June 8, Governor Deval Patrick (D) announced that he reduced his proposed $28.2 billion budget by more than $608 million because of uncertainty over the extension of additional American Recovery and Reinvestment Act (ARRA) Federal Medical Assistance Percentage (FMAP) funds , which Congress has not yet approved . If Congress does not approve the extension, the governor222s revis ed budget will make a 3.6 percent reduction in spending, with exceptions for local aid, school aid, and state debt services ( AP via The Boston Globe, 6/8 ). Update: BCBS of Massachusetts and Harvard Pilgrim Health Care Seek New Double - Digit Rate Increases : Blue Cross Blue Shield of Massachusetts (BCBS) and Harvard Pilgrim Health Care filed proposed double-digit rate increases for individual and small business plans up for renewal in the three - month period begin ning July 1. BCBS of Massachusetts is requesting increases averaging 12 percent and Harvard Pilgrim is requesting increases o f approximately 9 to 12 percent ; however, t he Massachusetts Department of Insurance (DOI) must approve the rate increases before they take effect. On April 1, Massachusetts Insurance Commissioner Joseph Murphy rejected 235 of 274 proposed health insurance rate increases, including those submitted by BCBS and Harvard Pilgrim. BCBS, Harvard Pilgrim, and four other insurers filed suit to place an injunction on the rate rejections but Suffolk Superior Court refused to grant the injunction and told the insurers they must exhaust the DOI appeals process before the court would hear the case. The insurers are currently appealing within DOI ( The Boston Globe, 6/3 ; Boston Herald, 6/3 ; Kaiser Health News, 6/3 ). Partners HealthCare Awards $3 Million Grant to Lynn Community Health Center : On June 7, Lynn Community Health Center officials announced that the center received a $3 million grant from Partners HealthCare to help fund the construction of a new addition to the center. The addition will cost $11 million in its first stage and will include space to offer behavioral health services. Officials project a second stage of the addition will cos t an additional $6 million. Construction on the first stage will begin the week of June 14 ( The Daily Item, 6/8 ). Mississippi Update: State Division of Medicaid Withdraws Propo sal to Cut Reimbursement Rates : O fficials with the Mississippi Division of Medicaid (DOM) withdrew their proposal to reduce Medicaid reimbursement rates for April, May , and June. DOM initially proposed the cuts on March 31 to el iminate a $14 million defic it; h owever, DOM officials withdrew the proposal because they no longer project a deficit through the end of the fiscal year. Several provider and pharmacist organizations filed suit against DOM on April 8 over the proposed cuts ( Clarion Ledger, 6/5 ; WLBT, 6/6 ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition June 9, 2010 6/9/2010 6 Missouri MFH Releases Report on Missouri222s Medicaid Program , Examines Effe cts of the National Health Care Refo rm Law: On June 1, the Missouri Foundation for Health (MFH) released the sixth edition of its annual 223Missouri Medicaid Basics224 report . The report examines the current state of Missouri222s Medicaid program and projects how it will change under the national health care reform law. MFH estimates the reform law will expand Missouri222s Medicaid rolls by 250,000 individuals ( The Daily Dunklin Democrat, 6/6 ). CenterPointe Hospital Opens Two Outpatient Behavioral Health Clinics for Teens : CenterPointe Hospital opened new behavioral health clinics for teenagers in Creve Coeur and Washington. The ser vices cost patients $400 weekly and e ach clinic can provide services to five to seven patients weekly ( St. Louis Post-Dis patch, 6/3 ). Montana CDAAP Withdraws Petition for Initiative to Fund Substance Abuse Treatment with Alcohol Tax Revenue: The Montana Coalition for Drug and Alcohol Abuse Prevention (CDAAP) withdrew its petition for a ballot initiative ( Initiative 163) to utilize $6 million in annual alcohol tax revenue to fund drug and alcohol abuse treatment. CDAAP withdrew the initiative in the face of state budget concerns ( AP via CNBC, 6/7 ). New Mexico DOJ Awards DPS Grant for Prisoner Substance Abuse Treatment : On June 4, U.S. Senator Jeff Bingaman (D -NM) announced that the U.S. Department of Justice (DOJ) awarded the New Mexico Department of Public Safety (DPS) a $216,000 grant to fund substance abuse treatment for state prisoners. DOJ is providing the funding through its Residential Substance Abuse Treatment (RSAT) for State Prisoners program. The funds will support five existing programs and double the size of a sixth , from 24 beds to 48 ( KRQE, 6/4 ). New York Legislature App roves Emergency Spending Bill, Reduces Health Care Funding : On June 7, the New York Legislature approved an emerg ency appropriations bill containing $385 million in health care spending cuts and project ing $300 million in savings from increased Medicaid fraud recovery. To keep the state government operating, t he legislature is passing emergency appropriations bills every week until a final budget is approved. Governor David Paterson (D) proposed the health care cuts as part of his June 4 weekly emergency spending plan ( The Wall Street Journal, 6/5 ; New York Daily News, 6/5 ; The New York Times, 6/7 ). Floating Hospital Fined $400,000 for Medicaid Fraud : On June 2, The Floating Hospital Community Clinic agreed to pay $400,000 in civil fines for alleged Medicaid fraud. Federal investigators contend that the hospital charged Medicaid for services provided at clinics it did not operate. The Floating Hospital is a safety -net hospital for poor New York City residents , offering both physical and mental health services ( New York Daily News, 6/3 ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition June 9, 2010 6/9/2010 7 Oklahoma Update: Governor Signs Bill to Assess Fee on Insurance Claims : On June 7, Governor Brad Henry (D) signed a bill ( HB 2437) that assesses a 1 percent fee on insurers for all paid claims. Lawmakers project the measure will raise $78 million annually. The funds raised from the fee will be held by the Oklahoma Health Care Authority and will draw down federal matching funds at a rate of three to one. The fee takes effect on August 26 ( The Tulsa World, 6/8 ). Pennsylvania State Insurance Department Submits Plan for High -Risk Pool to HHS : On June 2, the Pennsylvania Insurance De partment announced that it submitted a plan for creating a high -risk insurance pool to the U.S. Department of Health and Human Services (HHS). The pool will offer coverage to individuals who cannot obtain insurance because of a preexisting condition, as o utlined in the national health care reform law. The plan will charge monthly premiums of $168 for individuals who make less than 200 percent of the FPL and $468 for all other residents . State officials project that premium revenue and $160 million in federal funding through 2013 will allow the high -risk pool to cover 5,100 individuals. There are an estimated 800,000 uninsured individuals in Pennsylvania ; however, state officials do not know how many lack coverage because of preexisting conditions . HHS will decide whether to approve the plan by July 1 ( The Philadelphia Inquirer, 6/3 ; Kaiser Health News, 6/3 ). South Carolina Update: Legislature Approves Budget with Changes to Health Care Funding : On June 3, the South Carolina Legislature approved a nearly $5 billion budget. The budget eliminates a proposed cap on the state222s CHIP and limits Medicaid beneficiaries 222 prescription drug utilization . The budget also contains $300,000 for rural hospital grants and $800,000 for trauma centers. In addit ion, legislators removed $50 million in proposed fee and fine increases from the budget, reducing funding for health and social services programs. The budget now goes before Governor Mark Sanford (R) ( AP via CNBC, 6/3 ). Vermont State Regulators Find BCBS Overpaid Former CEO, Force Repayment to Subscribers: On June 2, the Vermont Banking, Insurance, Securities and Health Care Administration Department announced that a state investigation concluded that Blue Cros s and Blue Shield of Vermont (BCBS) overpaid its former CEO , William Milnes , by $3 million over eight years. Department officials say BCBS broke state law by compensating Milnes 45 to 50 percent more than the CEOs of comparable organizations. The departm ent is requiring BCBS to repay the funds by 2012 through reduced insurance premiums ( Burlington Free Press, 6/3 ; Kaiser Health News, 6/3 ).