WeeklyFinancingNewsPulseStateandLocalEditionfinal20100324.pdf (PDF | 241.14 kb)
SAMHSA222s Weekly Financing News Pulse: State and Local Edition March 24, 2010 3/24/2010 1 SAMHSA222s Weekly Financing News Pulse: State and Local Edition Arizona California Florida Georgia Idaho Illinois Indiana Kansas Kentucky Massachusetts Michigan Minnesota Mississippi Missouri New York North Carolina Ohio Pennsylvania Rhode Island South Carolina Tennessee Utah 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 March 24, 2010 3/24/2010 3 California Schwarzenegger Administration Proposes Placing UC System In Charge of Prison Medical Care : Governor Arnold Schwarzenegger222s (R) Administration has proposed allowing the University of California (UC) system to manage prisoners222 medical care, predicting that the change could save the state $12 billion over a decade. Under the proposed plan, the UC system would establish another agency to manage state prison doctors, dentists and psychiatrists and centralize purchasing of drugs and equipment. The plan also includes an expansion of the use of telemedicine, the implementation of electronic health records, cheaper bulk drug purchasing, and the possible construction or acquisition of a central hospital near several prison infirmaries. The project would start at 11 Northern California prisons before expanding to all 33 prisons statewide and require approval from the California Legislature and the federal judges presiding over inmate lawsuits on inadequate health care ( Los Angeles Times, 3/19 ). Mayor to Continue Healthy San Francisco Program : Mayor Gavin Newsom (D) announced on March 22 that the Healthy San Francisco program would continue despite the passage of the Democratic national health care reform legislation ( HR 3590 ). To qualify for Healthy San Francisco a resident must be uninsured, and not eligible for Medicaid. The program covers 51,000 of the 60,000 uninsured city residents and provides care at 31 clinics and 9 hospitals ( San Francisco Chronicle, 3/23 ). Florida House and Senate Release Proposed Budgets, Cut Health Care Funding: The Florida House and Senate released $67.2 billion and $68.6 billion budget proposals this week, respectively, both of which would increase total spending over this year222s $66.5 billion budget. Both proposals would allocate $20.7 billion to the Agency for Healthcare Administration and would reduce funding to the Florida Department of Health (DOH) from its 2009 level of $2.9 billion. The Senate budget would allocate $2.4 billion for the DOH while the House budget would allocate $2.3 billion. In addition, the Senate budget would cut health care spending on hospitals, nursing homes, mental health counseling, and homes for the developmentally disabled while the House plan calls for cuts of $146 million to nursing homes and $173 million to hospitals ( Sunshine State News, 3/23 ; St. Petersburg Times, 3/20 ). DJJ to Close Graceville Vocational Youth Center : The Florida Department of Juvenile Justice (DJJ) has opted not to renew its contract with Twin Oaks Juvenile Development Inc. to operate the Graceville Vocational Youth Center, a moderate risk detention center for boys ages 16 to 18. The center will close on June 29. The decision comes after the center received poor performance reviews in numerous areas, including deficiencies in mental health and substance abuse services. In both 2008 and 2009, the center failed to meet the minimum standards for mental health and substance abuse services. DJJ will move the current residents to other centers and may offer some employees positions at other locations. Facing $10.6 million in state budget cuts, DJJ is also considering other center closures ( Jackson County Floridian, 3/21 ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition March 24, 2010 3/24/2010 4 Update: Miami Dade County Officials Approve Deficit Reduction Plan for Jackson Health System : On March 18, Miami Dade County officials approved a plan to reduce Jackson Health System222s current $230 million deficit by cutting 655 positions, delaying payment of debt, and attempting to exact $30 million in union concessions. Under the approved plan, Jackson Health System will continue to run a deficit of $130 million this year. County officials included a provision in the approved plan advancing the system $80 million on the condition that the Public Health Trust is placed on 223management watch224 and involves the county mayor222s office in its deliberations ( New York Times, 3/18 ). Georgia Update: Central State Hospital in Milledgeville Closes Adult Mental Health Unit : In early March, the Georgia Department of Behavioral Health and Developmental Disabilities (DBHDD) closed the adult mental health unit in the Powell Building at Central State Hospital Milledgeville. DBHDD began diverting new patients to other facilities in November 2009 and has now completed the closure of the facility. As part of the closure, as many as 177 Central State employees may lose their jobs. Federal regulators found problems with the building, deeming it too old and outdated to serve the mentally ill. The closure comes as part of broader state changes to the mental health care system under federal oversight, stemming from U.S. Department of Justice (DOJ) investigations. The DOJ contends that the conditions in the state222s hospitals remain unsafe and is seeking an expansion of the state222s community based outpatient mental health services ( Macon Telegraph, 3/17 ). Idaho Update: Governor Signs Bill Opposing Federally Mandated Health Insurance: On March 17, Governor C.L. 223Butch224 Otter (R) signed the Idaho Health Freedom Act ( HB 391 ) into law, requiring the state attorney general to sue the federal government if federal law requires individuals to purchase insurance. On March 23, President Obama signed Democratic health care reform legislation ( HR 3590 ) requiring most individuals to purchase health insurance coverage or pay a penalty. Thirty seven other states have similar legislation pending. State legislators estimate that enforcement will require hiring an additional deputy attorney general, slated to cost $100,000 annually ( AP, 3/18 ). Illinois Governor Proposes $55.1 Billion Budget with Cuts to Mental Health Service Providers : Governor Pat Quinn (D) proposed his $55.1 billion budget on March 10, cutting spending by $2 billion. Governor Quinn222s budget would save $70 million by halving the prescription drug benefits offered to the elderly. In addition, the proposed budget would reduce payments to mental health service providers by $90 million ( BusinessWeek, 3/10 ; Chicago Tribune, 3/10 ; Pantagraph, 3/16 ). Illinois Supreme Court Upholds Ruling Withdrawing Hospitals222 Tax Exempt Status, Establishes Precedent: On March 18, the Illinois Supreme Court ruled that the Illinois Department of Revenue was correct to withdraw Provena Covenant Medical Center222s tax exempt status in 2004. According to the ruling, the center could not justify its tax exempt status because it received the majority of its income SAMHSA222s Weekly Financing News Pulse: State and Local Edition March 24, 2010 3/24/2010 5 through service fees and it did not provide charity treatment to all qualified applicants. There is currently no state law setting charitable standards for non profit hospitals, which include 75 percent of Illinois222 hospitals; however, state officials indicated that they might incorporate the court ruling into their policies assessing hospitals222 charitable status. Legal experts note that the case could go to the U.S. Supreme Court ( Chicago Tribune, 3/19 ). Indiana Governor to End Healthy Indiana Plan Under Democratic Health Care Reform : On March 22, Governor Mitch Daniels (R) said that the state will eliminate the Healthy Indiana Plan in light of the passage of the Democratic health care reform legislation ( HR 3590 ) signed into law by President Obama . The state plans to transition the 45,000 lowincome residents currently enrolled in the program onto Medicaid and Governor Daniels announced he is capping enrollment for the program while the state plans its termination. After eliminating the program, the states222 $119 million annual share of the funding will go to Medicaid ( Evansville Courier & Press, 3/22 ). Kansas House Committee Approves Budget, Senate Proposes Budget with Health Care Cuts : On March 18, the Kansas House Appropriations Committee approved a $5.1 billion budget for FY2011, relying entirely on cuts to reduce a $470 million deficit. In addition, the Kansas Senate plans to consider a measure to eliminate $86.6 million in spending, mostly through cuts to the Kansas Health Policy Authority and Kansas Department of Social and Rehabilitation Services (DSRS). The Senate cuts would reduce funding for mental health grants, grants for the disabled, and community independent living ( Kansas City Star, 3/21 ; Topeka Capital Journal, 3/18 ). Kentucky Update: Senate Passes $17 Billion Two Year Budget, Medicaid Affected : On March 22, the Kentucky Senate passed a two year, $17 billion budget, nearly $500 million less than the $17.5 billion budget passed by the Kentucky House March 5. In the first year, the Senate budget cuts funding for state agencies by 1.5 percent more than the House and cuts $26 million more from Medicaid. Beginning March 24, a House Senate committee will negotiate a single budget bill to present to Governor Steve Beshear (D) ( The State Journal, 3/23 ; WBKO, 3/23 ). Massachusetts State Officials Discover $295 Million Budget Shortfall, Blame Medicaid : During a routine budget review, state officials discovered a $295 million current year budget shortfall. The officials reported that increased use of MassHealth, Massachusetts222 Medicaid program, has contributed to the shortfall. MassHealth officials are attempting to manage the shortfall internally ( The Boston Globe, 3/20 ). Update: Attorney General Report Shows No Correlation Between Hospital Reimbursements and Quality: Massachusetts Attorney General Martha Coakley released a final report , finding that the most SAMHSA222s Weekly Financing News Pulse: State and Local Edition March 24, 2010 3/24/2010 6 prominent hospital groups in Massachusetts used their money, clout, and member base to obtain higher reimbursement fees from insurers. The report was discussed in a state hearing on hospital reimbursement inequalities last week, during which Harvard Pilgrim Health Care Inc. , released internal documents outlining reimbursement rates for individual hospitals and procedure types. The final report cited pay disparities of up to 100 percent for the same services and noted that, when comparing services between different hospitals, there was no correlation between the amount charged to insurers and the quality of care ( Boston Herald, 3/17 ). BU Study Finds Rising Hospital Costs Led to Higher Health Care Costs: A study released by two Boston University researchers found that rising hospital costs, not Massachusetts222 2006 health care reform law, led to increased hospital spending in the state. Massachusetts hospitals spent roughly 55 percent more per person than the average U.S. hospital in 2007. The BU study determined that Massachusetts222 hospital cost growth has outpaced the national average for all but two years from 1997 to 2007. They noted that, although the most significant increase occurred in 2006, the law had little time to take effect before the fiscal year ended and hospital spending growth slowed the year after reform despite a 5.7 percent increase in the state222s insurance rate. The researchers conclude that the state222s heavy reliance on teaching hospitals, high surgery rates, and a high number of doctors per capita are among factors contributing to the higher hospital expenses ( Modern Healthcare, 3/16 ). Commonwealth Fund Study Finds MCPAP Effective: A Commonwealth Fund study released March 3 found the Massachusetts Child Psychiatry Access Project (MCPAP) effective. The project provides psychiatric and clinical support to primary care providers (PCPs) treating children with mental health problems. The study found that 95 percent of Massachusetts children have PCPs enrolled in the project, and that PCPs believe they provide better care to children with mental health problems after participating in the project ( The Commonwealth Fund, 3/3 ). Michigan Senate Rejects Joint Resolution to Block a Federal Health Insurance Mandate: Sen ate Democrats defeated a bill ( SJR K ) on March 16 to block a federal health insurance mandate. If passed by a two thirds majority of the full Michigan Legislature, the bill would have put before the voters a prop osed c onstitutional amendment stating that no federal law or rule can compel a person, employer, or health care provider to participate in any health care system. The natio nal Democratic health care reform legislation ( HR 3590 ) signed by President Obama March 23 requires most individuals to have health insurance coverage or pay a penalty ( WLKM, 3/17 ). Minnesota County Officials Reveal Plan to Save Part of Mankato Mental Health Clinic: On March 19, county officials announced a plan to save part of a Mankato mental health clinic, which is slated for state closure in May.The plan would cost $547,500, about 42 percent of the $1.3 million per year it costs to SAMHSA222s Weekly Financing News Pulse: State and Local Edition March 24, 2010 3/24/2010 7 run the crisis center. Of that funding, $280,000 would maintain the capacity for overnight stays and the remainder would preserve urgent care services and short term stabilization ( The Free Press, 3/20 ). Mississippi State to Use Federal Medicaid Funds to Reimburse Medical Center : U.S. Department of Health and Human Services (HHS) Secretary Kathleen Sebelius informed U.S. Representative Steve Cohen (D) on March 18 that Mississippi may use supplemental Medicaid payments to reimburse the Regional Medical Center at Memphis (The Med) for treating Mississippi residents. The Med is a regional trauma center in Tennessee on the borders of both Mississippi and Arkansas. Arkansas also received approval to use supplemental Medicaid payments similarly last May ( WREG, 3/12 ). Missouri Missouri Senate Passes Legislation Mandating Insurance Coverage of Autism Spectrum Disorders: The Missouri Senate passed a bill ( SB 618) on March 18 that would require state regulated insurers to provide coverage for autism spectrum disorders (ASDs) for individuals up to age 21 and allow them to cap coverage at $55,000 annually. A similar bill previously passed in the Missouri House would require coverage until age 18 and allow a $36,000 annual price cap. Both bills222 coverage mandates will affect approximately 40 percent of the private insurance market. One of the two bills must pass through the other legislativebody before heading to Governor Jay Nixon (D) ( Kansas City Star, 3/18 ). Boone County Uses Federal Funding to Establish DWI Court : Using a $50,000 federal grant, Boone County has established a Driving While Intoxicated (DWI) Court Program as an alternative to jail time for repeat offenders. The new 30person court will operate alongside the already established drug and mental health courts. The federal grant covers the testing and tracking of participants; however, participants must cover their own treatment fees. To utilize the court, participants must maintain employment or a position in an educational or vocational program, attend 12step meetings, and remain in substance abuse treatment for the duration of their participation in the program. Thirteenth Circuit Associate Judge Christine Carpenter said that the cost of keeping an individual incarcerated in Boone County is about $50 a day, compared with $15 per day for drug court programs ( Columbia Missourian, 3/19 ). New York Senate Democrats Pass $136.2 Billion Budget : The New York Senate passed a $136.2 billion budget proposal on March 22, rejecting several of Governor David Paterson222s (D) tax proposals to collect new revenue on cigarettes and sugared beverages. The budget includes $15 million in new revenue from the legalization and sale of medical marijuana and accepts Governor Paterson222s proposed $1 billion in health care cuts. However, the budget does not include the governor222s proposed tax increases and readmission penalties on hospitals. The approved budget is a non binding resolution, but legislators plan to use it as a starting point for negotiation with the New York Assembly ( AP via BusinessWeek, 3/23 ; The Buffalo News, 3/23 ; Long Island Business News, 3/23 ; New York Daily News, 3/22 ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition March 24, 2010 3/24/2010 8 North Carolina Smoky Mountain Center Eliminating Psychiatric Services to Focus on Role as LME: As part of a broader move by the state to move Local Management Entities (LMEs) away from directly providing behavioral health services, the Smoky Mountain Center is transferring its mental health services to private companies. North Carolina222s 2003 mental health care reform asked LMEs to stop providing direct behavioral health services but the state gave the Smoky Mountain Center an exemption because of a lack of service providers in Western North Carolina. Meridian Behavioral Health and Appalachian Community Services have both submitted bids to take over the services, which are supported by approximately $4.5 million in annual state funding. Smoky Mountain Center will announce the winner of the service contract on March 26 ( Smoky Mountain News, 3/17 ). Mentor Drug Court Program to Begin April 6 : Lake County has started a drug court program using seed money from the United Way of Lake County and the Lake County Alcohol, Drug Addiction and Mental Health Services Board.The court is slated to begin April 6. The county has implemented the program over the past 10 months with the help of the sheriff222s department and local police departments. The drug court is open only to adults charged with misdemeanors involving drug abuse or addiction in Mentor Municipal Court. Eligible defendants must pose no threat to program staff or the community and participate in substance abuse counseling, treatment, and aftercare. The court program is voluntary, will offer 50 slots, and lasts for 32 weeks ( The News Herald, 3/21 ). Ohio Sandusky County Residents to Vote on Mental Health Levy: Residents of Sandusky County will vote May 4 on whether to institute a mental health levy to provide mental health counseling and services for county residents. The proposed 0.8 mills levy would last for five years and generate about $886,000 annually. The Mental Health and Recovery Services Board, which is comprised of representatives from Sandusky, Seneca, and Wyandot counties, chose to seek local funding in Sandusky County last summer and an identical millage measure failed on the ballot in November. Seneca and Wyandot counties both have mental health levies. If the levy passes in May, a committee of Sandusky County residents will convene to prioritize proposed services ( The News Messenger, 3/22 ). Pennsylvania State Raises Health Care Premiums for Wait List Health Care Program: On March 1, Pennsylvania raised premiums for individuals on the wait list for AdultBasic, the state222s health care program for adults earning up to 200 percent of the FPL that do not qualify for Medicaid. The state charges a $36 monthly premium for the 39,000 residents currently enrolled in the program and offers more expensive coverage to the 390,000 residents on the waitlist. Until March 1, the cost of coverage for those on the wait list was $313 per month; however, the state raised that premium to $600 per month because of rising costs ( New York Times, 3/16 ; Kaiser Health News, 3/17 ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition March 24, 2010 3/24/2010 9 Rhode Island State Health Insurance Commissioner Cuts Insurers222 Proposed Rates: On March 18, Rhode Island Health Insurance Commissioner Christopher Koller cut proposed rate increases for employer sponsored coverage through Blue Cross & Blue Shield of Rhode Island and UnitedHealthcare of New England . Blue Cross & Blue Shield had proposed rate increases of 11.9 percent for small groups and 14.6 percent for large groups. Koller allowed increases of 9.8 percent and 9.9 percent, respectively. UnitedHealthcare had proposed rate increases of 11.5 percent for small groups and 10.6 percent for large groups, but Koller222s cuts reduced them to 6 percent and 6.3 percent respectively. Koller222s decision affects 350,000 residents of Rhode Island; however, the majority of plans are renewed during the first half of the year and are therefore not subject to the new rates. Koller projects that changes will save employers and subscribers $30 million in premiums ( The Providence Journal, 3/19 ). South Carolina House Passes $5 Billion Budget, Uses Cigarette Tax Increase to Cover Medicaid Costs: On a 6452 vote, the South Carolina House passed a $5 billion budget on March 18. The budget includes a 30 cents per pack tax increase on cigarettes, intended to cover rising Medicaid costs. The budget also utilizes nearly$200 million in unapproved federal Medicaid assistance to avoid further cuts to health care programs. The bill now moves to the South Carolina Senate ( Charleston Region Business Journal, 3/18 ; Live 5 News, 3/18 ; The State, 3/18 ). Tennessee TennCare to Use $121 Million Federal Refund to Postpone Medicaid Cuts: TennCare officials announced on March 18 that they will use a $121 million federal refund from reimbursements made for prescription drug benefits to delay planned Medicaid cuts for one year. TennCare Director Darin Gordon said that the funding will delay limitations on non emergency outpatient visits, physician procedures, and the implementation of a $2 copayment on non emergency transportation, among other services. TennCare will cap recipient222s annual benefits at $10,000, but will temporarily exempt the cost of transplant hospitalization from the cap. Gordon is also reviewing a proposal by the Tennessee Hospital Association to implement a one year assessment to draw down additional federal matching funds and raise approximately $200 million to prevent some of the Medicaid cuts ( New York Times, 3/18 ). DADAS Awards Washington County Anti Drug Coalition $38,000 Grant: On March 18, the Tennessee Division of Alcohol and Drug Abuse Services (DADAS) awarded the Washington County Anti Drug Coalition a $38,000 grant to fund anti drug services within the community. Washington County Anti Drug Coalition staff has already utilized a portion of the grant to fund a trip to Washington, D.C. to attend a National Youth Initiative Leadership Conference ( Greenville Sun, 3/18 ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition March 24, 2010 3/24/2010 10 Utah State Data Shows Uninsurance Rate Stable from 2007 2009: Utah Department of Health (DOH) officials published data on March 17 showing that Utah222s uninsurance rate remained largely stable between 2007 and 2009, increasing from 10.6 percent to 10.8 percent. DOH Executive Director David Sundwall credits the stabilization to state efforts to enroll more children in CHIP. The data reveals that the number of uninsured children fell 27.9 percent between 2008 and 2009 while the number of uninsured adults increased 10.4 percent over the same period ( Salt Lake Tribune, 3/18 ; StandardExaminer 3/18 ).
