WeeklyFinancingNewsPulseStateandLocalEditionfinal20100317.pdf (PDF | 218.23 kb)
SAMHSA222s Weekly Financing News Pulse: State and Local Edition March 17, 2010 3/17/2010 1 SAMHSA222s Weekly Financing News Pulse: State and Local Edition Arizona California Connecticut Florida Georgia Idaho Illinois Kansas Kentucky Louisiana Massachusetts Minnesota Missouri Montana New Jersey New York North Carolina South Carolina Tennessee Texas Utah Virginia 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/enetwork/success.aspx For quest ions or comments, please contact Kevin Hennessy ( kevin.hennessy@samhsa.hhs.gov ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition March 17, 2010 3/17/2010 2 Around the States: State and Local Behavioral Health Financing News Arizona Update: Legislature Passes Budget Eliminating CHIP and Reducing Medicaid Eligibility : On March 11, the Arizona Legislature passed an $8.9 billion budget, cutting $1.1 billion in spending to close a $2.6 billion deficit for FY2011. Among other cuts, the budget would eliminate the state222s Children222s Health Insurance Program (CHIP), KidsCare, and restrict eligibility for the state222s Medicaid program, the Arizona Health Care Cost Containment System (AHCCCS). The Medicaid restrictions would terminate coverage for 310,000 adults to save $385 million; however, advocates note that they may prompt a legal challenge because voters directly approved the AHCCCS expansion 10 years ago ( Arizona Republic, 3/12 ; Kaiser Health News, 3/12 ). California UCLA Study Finds 2 Million Californians Lost Insurance Since 2007 : A report from the University of California- Los Angeles (UCLA) Center for Health Policy Research found that nearly 2 million Californians lost heath insurance during 2008 and 2009, bringing the total number of uninsured to 8 million. In addition, the study found that nearly 25 percent of non -elderly Californians currently lack health insurance. Data showed that uninsurance increased among all age groups; however, working adults were the most affected, largely because of rising unemployment ( UCLA, 3/16 ; Los Angeles Times, 3/16 ; Kaiser Health News, 3/16 ). Few Californians Benefit from Rescission Settlements : A report by the state222s Committee on Accountability and Administrative Review found that fewer than 200 of the 6,000 eligible Californians sought new individual coverage under a deal between the California Departments of Managed Care and Insurance and the state222s top -five insurers. The state reached a deal with the insurers to settle claims that they illegally terminated coverage for sick policyholders, a process known as rescission. In addition to paying fines, the deal required the insurers to reinstate the terminated beneficiaries under new policies. However, the committee report concluded that most eligible residents failed to obtain new coverage because the settlements were too complicated and the costs of new coverage were too high. A spokesperson for the state noted that, despite the low re- enr ollment, the suits have decreased the frequency of rescissions and increased access to health care across the state ( San Jose Mercury News, 3/9 ; San Francisco Chronicle, 3/10 ; Los Angeles Times, 3/10 ; Kaiser Health News, 3/10 ). Ventura County Mental Health Board Submits Budget Request, Eliminates Funding for 24 - Hour Facility : The Ventura County Mental Health Board submitted a $17 million budget request, eliminating $5 million in unused funding for a 24 - hour care center. Instead, the budget requests funding to open an intensive day -treatment program and funding for housing for up to 15 clients at a nearby mental health facility. The spending request now enters a 30 -day public comment period and goes to the Ventura County Board of Supervisors in April and then to the California Department of Mental Health (DMH) ( Ventura County Star, 3/15 ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition March 17, 2010 3/17/2010 3 Connecticut Connecticut AG Informs HHS Secretary Sebelius of WellPoint222s Potential Anti - Competitive Contracts : Connecticut Attorney General Richard Blumenthal authored a letter to U.S. Department of Health and Human Services (HHS) Secretary Kathleen Sebelius informing her of an ongoing state investigation into potential anticompetitive practices by WellPoint Inc.222s Anthem Blue Cross & Blue Shield of Connecticut . Blumenthal222s investigation has centered on clauses in Anthem222s contracts requiring that the insurer receive hospital prices at least as favorable as those provided to any competitor. A spokesperson for the company said they have been working with the attorney general222s of fice and do not believe that their contracts violate Connecticut law ( Bloomberg via BusinessWeek, 3/8 ; Kaiser Health News, 3/10 ). Florida House and Senate Committees Finalize DHHS Budget Proposals, Cut Health Care : The Florida Senate and House finalized health car e budget proposals designed to help close the state222s projected $3.2 billion deficit. The Senate222s proposal would cut $1 billion from the Florida Department of Health and Human Services (DHHS) including eliminating Medicaid prenatal coverage for women earning over 150 percent of the federal poverty level (FPL), reducing home-care, and ending the state222s $27 million Healthy Families program that teaches family skills to high -risk resident s. In addition, the Senate proposal may also cut $74 million from substance abuse programs, reduce children222s mental health services, and eliminate mental health program staff ( Tampa Bay Online, 3/16 ; Palm Beach Post, 3/11 ). Georgia Governor Proposes Health Care Fundi ng Cuts: As part of a broader $442 million package of cuts, Governor Sonny Perdue (R) proposed numerous health care cuts after state legislators voiced opposition to his original proposal to institute a 1.6 percent tax on hospital revenues. Governor Perdue222s newest proposal would reduce hospital and health care provider Medicaid reimbursements by 10.25 percent and eliminate non -profit hospitals222 sales tax exemption. Taken together, the moves are expected to cost hospitals $274 million ( AP via BusinessWeek, 3/12 ; Gainesville Times, 3/16 ; Becker222s Hospital Review, 3/12 ). Idaho Update: Legislature Passes Bill to Block Health Care Mandate in National Health Reform : On March 12, the Idaho Legislature passed the Idaho He alth Freedom Act ( HB 391 ), affirming that no entity may require Idaho residents to purchase health care or participate in any health plan. In addition, the bill requires the Idaho Attorney General to defend state residents against any such mandate. Designed to block a potential individual health insurance mandate included in the Democratic national health care reform bills, HB 391 now heads to Governor C. L. 223Butch224 Otter (R) ( Argus Observer, 3/13 ; Idaho Legislature, 3/15 ). Illinois Update: State, ACLU Reach Agreement to Transition Mentally Ill Residents Out of IMDs : The American Civil Liberties Union (ACLU) has reached an agreement with Illinois officials to settle a 2005 lawsuit in which the ACLU contended that the state violated the American222s with Disabilities Act by housing SAMHSA222s Weekly Financing News Pulse: State and Local Edition March 17, 2010 3/17/2010 4 mentally ill patients in 223institutions for mental disease224 (IMDs). Under the terms of the deal, Illinois will offer the 4,500 mentally ill IMD residents the option of undergoing assessments for placement into less - institutional settings. Disability advocates contend that the transition could also save the state $50 million over several years, largely by allowing Illinois to receive federal Medicaid funds for community - based care provided outside of IMDs. To finalize the deal, U.S. District Judge William Hart must schedule a fairness hearing to approve the plan222s specifics. In addition, though the settlement is consistent with the recommendations of Governor Pat Quinn222s (D) nursing home task force, it does not explicitly address the 10,000 mentally ill residents living in state nursing homes that are not cl assified as IMDs. Pursuant to the task force222s recommendations, the state is also increasing its supportive housing capacity to transition such residents out of nursing homes within five years ( Chicago Tribune, 3/15 ; McKnight222s Long-Term Care News & Assisted Living, 3/16 ; AP via Chicago Sun Times, 3/15 ). Kansas Behavioral Health Center Receives Grant : The Sunflower Foundation: Healthcare for Kansas has a warded Pawnee Mental Health Services222 Substance Abuse Treatment Access for the Indigent program a $43,700 grant. The grant will help fund outpatient substance abuse treatment for individuals earning 200 to 400 percent of the FPL. Pawnee serves 7,000 peop le annually in 10 Kansas counties ( KTKA, 3/11 ). Kentucky Hospital Eliminates 500 Jobs Citing Declining Patient Load, Rising Costs : Jewish Hospital & St. Mar y222s Healthcare is eliminating 500 jobs, citing decreased patient load and an increasing number of costly uninsured patients. The job reductions, which eliminate 6 percent of the hospital222s workforce, are the first large -scale layoffs in a Louisville hospital system since the recession began. A spokesperson for the hospital said patient load is currently 3 to 7 percent bellow projected 2010 levels and noted that the hospital system222s charity care obligations increased from $52 million in 2008 to $68 millio n in 2009. Hospital officials said the reductions are part of a broader plan to save the hospital $55 million ( Courier Journal, 3/10 ; WLKY, 3/11 ; Kaiser Health News, 3/11 ). Louisiana State Sen. Crowe Files Bill to Block Federal Health Care Mandate : Like lawmakers in more than 30 other states, State Sen. A. G. Crowe (R) filed legislation to assert the state222s right to refuse any federal health care mandate included with Democratic national health care reform legislation. The Louisiana Legislature will consider the bill, the Louisiana Health Care Freedom Act , during the regular session that begins March 29 ( AP via BusinessWeek, 3/9 ; Kaiser Health News, 3/10 ). Massachusetts Harvard Pilgrim Discloses Hospital Reimbursement Inequalities: In written testimony for a state hearing exploring Massachuset ts222 rising health care costs, the state222s second -largest insurer, Harvard Pilgrim Health Care Inc. , released internal documents outlining reimbursement rates for individual hospitals and procedure types. Confirming the results of Massachusetts Attorney Ge neral Martha Coakley222s previous investigation, Harvard222s records showed a significant disparity in hospital reimbursement based on hospital 223clout224 and geography. The Executive Secretary of the SAMHSA222s Weekly Financing News Pulse: State and Local Edition March 17, 2010 3/17/2010 5 Massachusetts Office of Health and Human Services said that, though there are legitimate reasons for some inequalities, the differences should not be so great. The secretary noted that the state is developing a new payment system for providers to reduce the disparity and drive down health care costs ( Boston Globe, 3/16 ; Kaiser Health News, 3/16 ). State R eaches $3.6 Million Medicaid Settlement with Actavis: The Massachusetts Office of the Attorney General reached a settlement with generic drug maker Actavis Elizabeth LLC over allegations that the company defrauded the state222s Medicaid program by artificially inflating drug prices. Under the terms of the deal, Actavis will pay $3.6 million to compensate MassHealth, the state222s Medicaid program. Actavis was one of 13 generic drug makers sued by the state in 2003; the attorney general222s office has settled with nine others and charges remain pending against three ( Boston Globe, 3/10 ). Minnesota DHS Reduces Mental Health Funding, Plans Mental Healt h System Reform : As part of Governor Tim Pawlenty222s (R) latest budget recommendations, the Minnesota Department of Human Services (DHS) plans to reduce mental health spending by $17 million while broadening access to care. DHS plans to close mental health facilities in Cold Spring, Mankato, and Eveleth and cut 200 full time positions by June 30, 2011. However, DHS also plans to redesign its service delivery system, creating new psychiatric care centers to provide assessments and one -day crisis care. The state says the new facilities will provide faster assessment and placement than the current system and plans to create additional step - down facilities for subsequent treatment. In addition, DHS222 new system will shift the responsibility for transporting mentally ill patients away from law enforcement ( Pioneer Press, 3/10 ; AP via WCCO, 3/10 ; Northland222s News Center, 3/12 ). Missouri Governor Proposes $126 Million in Cuts, Medicaid Affected : On March 11, Governor Jay Nixon (D) proposed $126 million in cuts to the state222s current - year budget, incl uding a nearly $120 million reduction in health care spending. The governor222s proposal would eliminate home care for the disabled, reduce spending on anti - psychotics, shift some state costs to Medicare, and lower some Medicaid reimbursement rates. However, the Missouri Legislature has already rejected the elimination of in - home care ( AP via Business Week, 3/12 ; St. Louis Post Dispatch, 3/14 ; Kaiser Health News, 3/12 ). Montana Governor Seeks Federal Permission to Import Prescription Drugs from Canada : On March 11, Governor Brian Schweitzer (D) announced plans to seek federal permission to import prescription drugs from Canada for use in state insurance programs. Governor Schweitzer estimates that importing the drugs could reduce the state222s $100 million annual prescription drug costs for Medicaid, CHIP, state employees, and inmates by $40 million. The governor is asking HHS Secretary Kathleen Sebelius to certify the Canadian drugs as safe and waive Medicaid provisions requiring that states spend such funds within the U.S. Centers for Medicare & Medicaid (CMS) officials said they had not yet seen Montana222s proposal and could not comment ( AP via New York Times, 3/11 ; Kaiser Health News, 3/12 ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition March 17, 2010 3/17/2010 6 New Jersey Governor Proposes Budget, Mental Health Services Affected : Governor Chris Christie (R) proposed a $29.3 billion budget on March 16, reducing state spending by 5 percent and relying on $1 billion in American Recovery and Reinvestment Act (ARRA) funding to close an estimated $11 billion budget deficit. In addition to substantial cuts to education, Governor Christie222s budget would close some state psychiatric institutions, impose higher deductibles and copayments under the state222s Medicaid program, and significantly reduce payments to cities and towns. In related news, Governor Christie signed an executive order on March 11, creating the five - member New Jersey Privatization Task Force to find places where the state could reduce costs and improve quality through privatization ( New York Times, 3/16 ; Philadelphia Inquirer, 3/12 ). New York Update: UnitedHealthcare and Continuum Reach Rate Agreement : After contentious negot iations, UnitedHealthcare (UHC) and Continuum Health Partners (CHP), a consortium of five New York hospitals, have reached an agreement on reimbursement rates and admission notification procedures. UHC had initially requested that CHP inform the insurer of policyholders222 admissions within 24 hours and threatened to reduce reimbursements by 50 percent for late notification. However, UHC and New York officials indefinitely postponed the notification measure and CHP reached a contingency deal with UHC in the event that the policy is cleared for implementation in New York. In addition to the notification procedures, the negotiations focused on Medicare Advantage (MA) reimbursement rates. UHC sought significant rate reductions, largely because of federal MA f unding reductions included within national Democratic health care reform proposals ( New York Times, 3/12 ). North Carolina DHHS Implements Medicaid Preferred Drug List, Estimates $90 Million Annual Savings: Effective March 15, the North Carolina Department of Health and Human Services (DHHS) instituted a preferred drug list for the state222s Medicaid program estimated to save the state $90 million annually. Initially, the preferred list will include all drugs currently covered under Medicaid; however, DHHS will remove some drugs over time in consultation with the North Carolina Physician222s Advisory Group . In addition, the state plans to consult mental health experts before removing any mental health medications from the preferred list. Non- preferred drugs will remain available with prior authorization and for children requiring certain medication under the Early Periodic Screening, Diagnosis and Treatment (EPSDT) program ( WWAY, 3/15 ; AP via BusinessWeek, 3/15 ). South Carolina House Approves Budget Maintaining Health Care Funding, Relying on ARRA FMAP Extension: On March 15, the South Carolina House approved legislation to avoid all of the health care cuts approved by the House Ways and Means Committee . The House budget relies on $200 million in increased federal funding that South Carolina would receive if Congress approves the ARRA Federal Medical Assistance Percentage (FMAP) extension passed by the U.S. Senate on March 10. However, if Congress and the President do not approve the ARRA extension, the House budget would eliminate in -home services for the disabled, impose a three-prescription cap on Medicaid enrollees, and reduce eligibility SAMHSA222s Weekly Financing News Pulse: State and Local Edition March 17, 2010 3/17/2010 7 for the state222s health care program to 150 percent of the FPL ( The State, 3/16 ; Augusta Chronicle, 3/16 ; The State, 3/12 ; Kaiser Health News, 3/16 ). Tennessee West Tennessee Mental Health Facility Expands : On March 12, the Western Mental Health Institute opened a $56 million addition, including a new mental health inpatient unit, funded with state funds allocated by the Tennessee Legislature in 2004. Western currently provides inpatient mental health serv ices for 21 West Tennessee counties ( Jackson Sun, 3/13 ). Texas CentroMed to Receive $31 Million Grant for Community Health Care : U.S. Rep. Ciro R odriguez (D - TX) announced a $31 million five-year HHS grant for El Centro del Barrio, CentroMed, a network of 19 community clinics providing medical, dental, and behavioral health care in Texas. In 2008, CentroMed provided health care to 67,000 individuals, 67 percent of whom were uninsured ( San Antonio Express News, 3/14 ). Utah Update: Legislature Approves Health Care Reform Bills: On March 9, the Utah Legislature approved legislation ( HB 294) to expand the state222s web -based health insurance exchange to groups with more than 50 employees. The exchange currently only offers coverage for small group employers. Beginning in 2013, HB 294 would also expand the scope of the state risk adjuster to affect insurers outside of the exchange. However, the bill222s sponsor, Utah House Speaker David Clark (R), said he will repeal the legislative section implementing the risk adjuster in 2013 if insurers develop policies accessible to most of Utah222s 300,0 00 uninsured residents. In related news, the legislature approved HB 67 requiring the Utah Legislature to approve any national health care reform enacted by the federal government prior to implementation within the state and a resolution ( HCR 8 ) urging Congress not to interfere with the state222s health care reform plans ( Desert News, 3/11 ; Kaiser Health News, 3/12 ). Virginia Legislature Approves Budget, Cuts Affect Health Care and Mental Health : The Virginia Legislature passed an $82 billion two - year budget, cutting funding for nearly every department to close the state222s projected $4 billion deficit. In total, the legislature cut $1 billion from health care programs, limiting community - based mental health services, reducing Medicaid provider reimbursements, and enrolling fewer children in state-sponsored coverage. The budget will reduce current-year Medicaid reimbursements by 3 percent and FY2011 reimbursements by 4 percent. Though the legislature222s budget includes Governor Bob McDonnell222s (R) proposed $680 million in health c are cuts, the budget avoids an additional $360 million in health care cuts assuming that President Barack Obama will sign legislation continuing the ARRA FMAP increase before July 1. The budget now heads to Governor McDonnell who has 30 days to amend the legislation ( Washington Post, 3/15 ; Insurance & Financial Advisor, 3/15 ; South Hill Enterprise, 3/16 ; Kaiser Health News, 3/15 ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition March 17, 2010 3/17/2010 8 Washington Update: Walgreens to Stop Accepting New Medicaid Patients April 16 : After postponing a planned wi thdrawal from the state222s Medicaid program, Walgreen Co. announced plans to stop accepting new Medicaid patients effective April 16. In January, Walgreens announced plans to withdraw 64 of its 121 Washington pharmacies from the state222s Medicaid program un less the state raised its brand - name reimbursement rate. On February 12, the company reached an interim deal to delay that withdrawal, planning to work with the state until March 15 to reach a compromise plan ( Business Wire via Market Watch, 3/15 ).
