WeeklyFinancingNewsPulseStateandLocalEditionfinal20100303.pdf (PDF | 335.23 kb)
SAMHSA222s Weekly Financing News Pulse: State and Local Edition March 3, 2010 3/3/2010 1 SAMHSA222s Weekly Financing News Pulse: State and Local Edition Alaska Arizona Arkansas California Florida Idaho Illinois Iowa Kentucky Maryland Massachusetts Michigan Minnesota Montana Nevada New Hampshire New Mexico New York North Carolina Ohio Texas Utah Virginia Washington West Virginia 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 Note: Last Week222s Weekly Financing News Pulse reported that the Kentucky story 223Medicaid Commissioner Says Managed Care Program More Costly than Traditional Medicaid224 was about the Kansas Medicaid program. The full story is updated in this edition and we have corrected the version posted on our website ( http://samhsa.gov/financing ). For questions or comments, please contact Kevin Hennessy ( kevin.hennessy@samhsa.hhs.gov ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition March 3, 2010 3/3/2010 2 Around the States: State and Local Behavioral Health Financing News Alaska Public Insurance for Non Profits Extended to Small Businesses: The Alaska State Chamber of Commerce and a non profit advocacy organization announced February 24 that a publicly funded health insurance plan for non profit employees has been extended to small businesses. The goal of the insurance expansion, offered by Premera Blue Cross Blue Shield of Alaska , is to attract and retain more employees to the private sector. The publicly funded plan is more costly than many alternatives but aims to establish group rates and promote healthy lifestyles to reduce rates ( Anchorage Daily News, 2/24 ). Arizona Senate Panel Approves Bill to Move Behavioral Health Patients From Maricopa County222s Mental Health Contractor to the AHCCCS : On February 24, the Arizona Senate Healthcare and Medical Liability Reform Committee approved SB 1390 to integrate primary care and mental health care in Maricopa County. Introduced by State Senator Carolyn Allen (R) and supported by Governor Jan Brewer (R), the bill would move 40,000 Maricopa County residents with behavioral health conditions from Magellan Health Services to the Arizona Health Care Cost Containment System (AHCCCS), the state222s Medicaid program. Critics say the bill does not effectively address the needs of people with serious mental illness (SMI), as peoplewith SMI would enroll in a pilot program not yet finalized ( Arizona Republic, 3/2 ). Arkansas State Posts Medicaid Cost Reduction Proposals Online : The Arkansas Department of Human Services has posted Medicaid cost cutting recommendations from over 100 stakeholders on the department222s website . As the state faces an estimated $400 million Medicaid deficit by 2012, Division of Medical Services Director Gene Gessow plans to review all proposals and present a recommendation to the governor this spring ( Arkansas News, 3/2 ). California Prop. 63 Funded Behavioral Health Court Opens in San Diego County : On February 23, the San Diego Superior Court held its first hearing of Behavioral Health Court, a specialty court for people with mental health disorders that sentences them to treatment and supervision rather than jail. The court is funded by $800,000 annually from the voter approved Mental Health Services Act (Proposition 63) as part of an initiative to support prevention, intervention, and infrastructure for county mental health programs. Superior Court Judge Robert Trentacosta , the county222s first Behavioral Health Court judge, stated that the system seeks to end the cycle of incarceration by providing necessary mental health care services and housing. Though new to San Diego County, 25 California counties already have similar courts ( KPBS, 3/2 ; KPBS, 2/23 ). Consumer Group Sues Anthem Blue Cross Over Policy Changes : After Anthem Blue Cross of California announced plans to increase individual policyholders222 premiums by as much as 39 percent, U.S. Department of Health and Human Services (HHS) Secretary Kathleen Sebelius, Congress, and the SAMHSA222s Weekly Financing News Pulse: State and Local Edition March 3, 2010 3/3/2010 3 California Department of Insurance rebuked the insurers parent company, WellPoint Inc. , and took action to examine the rates. Now, Consumer Watchdog (CW), a consumer advocacy group, has sued Anthem, claiming that the company violated state law by closing certain policies to new enrollees and offering remaining customers policies with fewer benefits and at higher rates. CW is also seeking class action status for the suit ( Los Angeles Times, 3/2 ; Reuters, 3/1 ; Kaiser Health News, 3/2 ). Coalition Creates Health Care Plan for Uninsured Workers : Working Partnerships USA, the Santa Clara Family Health Plan, and the Santa Clara Valley Health and Hospital System have formed a coalition to offer lowcost health care to uninsured small business employees in Santa Clara County. The plan, called Healthy Workers, will be open to employees in participating companies with two to 50 employees. Eligible enrollees must be between ages 18 and 64, earn roughly $18 an hour or less, and work a minimum of 20 hours a week. The plan offers comprehensive coverage with a small copayment and enrollees are responsible for a $75 monthly premium combined with a $150 per enrollee per month premium from participating employers ( San Jose Mercury News, 3/1 ). Federal Judge Blocks Cuts to Medi Cal Adult Day Health Care Program : A federal judge issued an injunction preventing the state from cutting funds from the Adult Day Health Care program, a Medi Cal program that provides community based care and supervision for lowincome residents, including over 37,000 older adults and people with mental disabilities. The cuts prompted patients losing services to file lawsuits against the state. U.S. District Judge Saundra Brown Armstrong ruled that removing 20 to 40 percent of covered patients from the program violated federal law and that the state did not provide adequate replacement care ( San Francisco Chronicle, 2/25 ). Florida Legislators Introduce Two Bills to Combat Prescription Drug Abuse : Lawmakers in the Florida Legislature have introduced two bills designed to combat prescription drug abuse in the state. HB 225 would prohibit physicians from prescribing more than a threeday supply of controlled substances to patients paying for their drugs in cash. In addition, SB 2272 would prohibit felons or physicians with prescription drug violations from owning pain clinics. SB 2272 would also require criminal background checks for all pain clinic owners and operators and allow the Florida Department of Health to examine patients222 records to detect patterns of prescription drug abuse ( St. Petersburg Times, 2/28 ). Bill Introduced to Eliminate Subsidized Health Insurance for State Employees : Florida State Reps. Marlene O222Toole (R) and Debbie Mayfield (R) introduced a proposal to mandate all state employees pay for health insurance, ending free coverage for approximately 17,000 people. The proposal comes as the state222s health care costs have increased 32 percent over four years. Insurance coverage under the new state option would require families to pay $180 per month and individuals to pay $50 per month ( Tallahassee Democrat, 2/24 ). Idaho Survey Finds Fewer Idaho Employers Offer Health Insurance : The Idaho Department of Labor222s 2009 Fringe Benefit Survey found that the number of employers offering health coverage to their full time SAMHSA222s Weekly Financing News Pulse: State and Local Edition March 3, 2010 3/3/2010 4 employees dropped to 56 percent in 2009, down from 63 percent in 2007, 74 percent in 2005, and 82 percent in 2002. The survey also found that employers with fewer than 10 workers were the most likely to reduce or eliminate coverage. Finally, the survey found that only 56 percent of employees with access to coverage enrolled in employer sponsored plans and that employers offering health coverage paid an average of 83 percent of the monthly premium ( Idaho DOL, 2/26 ; Idaho Statesman, 2/27 ). Illinois Legislators Seek to Delay Medicaid HMO Pilot Program Over Capacity and Readiness Concerns : Some state legislators are seeking to postpone a Medicaid HMO pilot program for 40,000 seniors and adults with disabilities in Cook, DuPage, Kane, Kankakee, and Will Counties. The program, run by the Illinois Department of Healthcare and Family Services , would require seniors to enroll in one of two HMO plans that are more restrictive than most of the state222s Medicaid offerings. Legislation ( HB 5086 ) introduced in the Illinois General Assembly on January 29 by State Rep. Linda Chapa LaVia (D) would create a task force of stakeholders to evaluate the mandatory managed care programs.In addition, some state lawmakers say they are concerned about provider capacity and participation as well asthe state222s readiness to implement the program ( Chicago Tribune, 2/25 ). Iowa Update: Senate Passes Scaled Back IowaCare Bill : The Iowa Senate passed an amended version of a bill ( SF 2356 ) to allow IowaCare beneficiaries to obtain care outside of Iowa City and Des Moines.IowaCare, the state222s program for residents earning up to 200 percent of the federal poverty level (FPL) that do not qualify for Medicaid, currently only covers treatment at select providers in those cities. SF 2356 would also create an insurance information exchange that would consolidate information about private insurance offerings in Iowa. Prior to the amendment, SF 2356 would have expanded coverage to all Iowans earning up to 300 percent of the FPL contingent upon the availability of federal funds, insuring an additional 100,000 Iowans. The bill now heads to the Iowa House ( Des Moines Register, 3/2 ; Radio Iowa, 3/1 ; Kaiser Health News, 3/2 ). Kentucky Update: Medicaid Commissioner Says Managed Care Program More Costly than Traditional Medicaid, Managed Care Officials Disagree, House Speaker Demands Clarification : In a letter to the Kentucky House Budget Committee , Kentucky Medicaid Commissioner Elizabeth Johnson said that the state222s Medicaid managed care program, Passport, is more expensive than the state222s traditional Medicaid program. Johnson notes that the average per member cost for Passport was $388.89 per month in 200922721 percent more than the regular Medicaid program. Johnson attributes much of the difference to administrative expenses and hospital care. However, passport officials contend that the program saves the state $123 million annually. Passport currently serves 165,000 residents in 16 counties and the Kentucky Legislature is considering expanding the program to help close the state222s $1.5 shortfall for the 2010 12 budget year. House Speaker Gregg Stumbo (D) has asked Cabinet for Health and Family Services Secretary Jane Miller to clarify the cost effectiveness issue ( Courier Journal, 2/17 ; Kaiser Health News, 2/18 ; AP via WLKY, 3/1 ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition March 3, 2010 3/3/2010 5 Maryland Chestertown Mental Health Clinic Closes to Save State Funds : Stemming from cuts outlined by the Maryland Board of Public Works in August 2009, the Upper Shore Community Mental Health Center (USCMHC) in Chestertown closed on February 28. State officials plan to send patients to other area hospitals and expect the closure to save $2.7 million this year and $7 million in subsequent years ( WBOC, 3/2 ). Massachusetts Governor Seeks CMS Waiver Adjustment for Additional Hospital Funding: Governor Deval Patrick (D) is asking the Centers for Medicare & Medicaid Services (CMS) to approve a modification to the state222s 2008 Medicaid waiver that allows Massachusetts to subsidize insurance for residents with incomes above the typical Medicaid cutoff. Under the current waiver, which runs until July 2011, Massachusetts can spend up to $21.2 billion to cover this population, with roughly half of the funding coming from the federal government. Governor Patrick is seeking a waiver modification that would allocate the state an additional $480 million over this fiscal year and next. Under the modified agreement, an additional $135 million would go to private hospitals treating Medicaid or Commonwealth Care patients, $216 million would fund the state222s only public acute care hospital, and additional funding would fund infrastructure and HIV/AIDS programs ( Boston Globe, 3/2 ; Kaiser Health News, 3/2 ). Update: Immigrants Sue State for Eliminating Health Coverage : A group of legal immigrants residing in Massachusetts filed a class action lawsuit February 25 against the Massachusetts Legislature . The suit alleges the Health Connector , the state agency that oversees the state222s lowincome public health program, violated immigrants222 rights to equal protection by eliminating Commonwealth Care coverage for 26,000 legal immigrants to balance the state222s budget last year ( Boston Globe, 2/25 ). Michigan MHHA Report Finds Many Hospitals Lost Money in FY2008 : A report by the Michigan Health and Hospitals Association (MHHA) found that 134 non profit Michigan hospitals incurred $797 million in uncompensated care in FY2008, $557 million for uncollected debts and $240 million for charity care. The report notes that the hospitals lost an additional $706 million on Medicaid beneficiaries and $359 million from beneficiaries of other government programs, including Medicare. On average, Michigan hospitals lost money in FY2008 and the MHHA documented numerous instances of layoffs, hiring freezes, and service eliminations. The report attributes the losses to the recession and failure to enact health care reform and urges lawmakers to reform the health care system without reducing Medicaid or Medicare reimbursement rates ( Detroit Free Press, 3/1 ; Kaiser Health News, 3/1 ). Minnesota Update: House Fails to Override Governor222s Veto of Bill to Extend GAMC : On March 1, House Democrats failed to override Governor Tim Pawlenty222s (R) veto of a bill designed to maintain the state222s General Assistance Medical Care (GAMC) program, the state program providing health coverage to residents earning less than $7,800 annually.The Senate voted to override the veto last week. Governor Pawlenty cut funding for GAMC at the end of the last legislative session and, under the governor222s plan, SAMHSA222s Weekly Financing News Pulse: State and Local Edition March 3, 2010 3/3/2010 6 the program is slated to end March 31. The state will transition residents currently enrolled in GAMC to MinnesotaCare, a state health care program with fewer benefits. The rejected bill would have extended a reduced version of GAMC through June 2011 for $284 million ( Pioneer Press, 3/1 ). Hennepin County Sheriff222s Office Participating in Cost Saving DARE Pilot : Working with Minnesota222s Drug Abuse Resistance Education (DARE), the Hennepin County Sheriff222s Office will become the first law enforcement agency in the country to participate in a new DARE pilot program designed to reduce program costs. The pilot allows law enforcement to staff DARE with retired deputies, reducing costs and limiting the use of active police officers222 time ( AP via CBS, 2/27 ). Montana Warner to Form Advisory Committee to Distribute Mental Health Trust Funds : Former State Supreme Court Justice John Warner is forming a seven member advisory committee to help allocate grants from the $9.5 million Montana Mental Health Settlement Trust. The trust, which was created last week as part of a settlement with Eli Lilly & Co. over the company222s illegal marketing of the anti psychotic, Zyprexa, will fund programs designed to treat and prevent mental illness. Trust funds may also finance intervention training for law enforcement personnel and training for medical professionals in appropriate prescription drug practices. The trust must be distributed by the end of 2012 and Warner expects to begin allocating funds this year ( Billings Gazette, 3/1 ). Nevada Update: Legislature Approves Budget Deal, Reduces Proposed Social Service Cuts : On February 28, state legislative leaders and Governor Jim Gibbons (R) reached a tentative deal to close the state222s $887 million budget gap22722 percent of the state222s budget 226 and the Nevada Legislature approved the stopgap measure March 1. Among other changes, the deal restores many social service programs that Governor Gibbons had proposed eliminating, including numerous Medicaid services. The deal also reduces a proposed 10 percent cut in social services funding ( Wall Street Journal, 3/1 ; Las Vegas Review Journal, 3/2 ). New Hampshire Senate Bill Would Create State Commission to Regulate Hospital Rates : On February 17, State Senator Maggie Hassan (D) proposed a bill ( SB 505 ) to create a three member hospital cost review commission to regulate rates for all New Hampshire hospitals. The commission would set rates for every procedure, though rates would vary across hospitals depending on the hospital222s percentage of Medicaid and charity care patients. The rate controls would require hospitals to charge patients the same amount for any given procedure regardless of their insurance status. If approved, the bill would create the commission September 2010 and the commission would begin setting rates in 2011. In addition, the bill would fund the commission through hospitals fees slated to generate $3.5 million annually beginning in 2012. The bill is now under consideration by the Senate Commerce, Labor and Consumer Protection Committee ( Concord Monitor, 3/2 ; WMUR, 3/1 ; Kaiser Health News, 3/2 ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition March 3, 2010 3/3/2010 7 New Mexico Governor to Sign Bill Regulating Insurers222 Medical Loss Ratio : Governor Bill Richardson (D) is expected to sign legislation ( HB 12 ) introduced by State Rep. John Heaton (D) and passed by the New Mexico Legislature on February 18. The bill requires New Mexican health insurance companies to use 85 percent of all revenue generated by premiums towards health care services. According to New Mexico Public Regulation Commission222s Insurance Division , 85 percent is the industry average 223medical loss ratio,224 or percentage of premium revenue used to cover medical costs ( New Mexico Business Weekly, 2/26 ). New York Update: Judge Orders New York City to Move Mentally Ill Out of Large Institutional Housing : Rejecting a corrective action plan that Governor David Paterson (D) proposed last year in a U.S. District Court case (Disability Advocates Inc. v. David A. Paterson et al.), Judge Nicholas Garaufis is forcing New York to create non institutional housing units for the mentally ill. Enacting a proposal submitted by disability advocates and approved by the U.S. Department of Justice (DOJ), Judge Garaufis has ordered New York to create at least 1,500 housing units per year for three years to house mentally ill patients in New York City. In the original case, advocates alleged that New York violated the Americans with Disabilities Act by housing mentally ill individuals in adult homes that do not allow them to interact with the community. A spokesperson from Governor Paterson222s office says the state may appeal the decision ( New York Times, 3/1 ). North Carolina New Emergency WalkIn Behavioral Health Clinic Open in Jacksonville : Coastal Carolina Neuropsychiatric Center and Onslow Carteret Behavioral Health Services opened a walk in emergency behavioral health clinic in Jacksonville on March 1. The facility will be open 24 hours a day and seven days a week, offering emergency walk in services for both substance abuse and mental health conditions. In addition, the facility provides state ordered behavioral health evaluations and will eventually offer detoxification services. A spokesperson for Coastal and Onslow said the facility is designed to shift patients away from hospital emergency rooms and notes that the new facility will not deny patients because of inability to pay ( Jacksonville Daily News, 3/2 ). Ohio Governor Signs Bill Extending 223Mini COBRA224 Benefits to Small Businesses : Governor Ted Strickland (D) signed HB 300, extending the state222s 223mini COBRA224 coverage from 12 to 15 months. The bill also extends the American Recovery and Reinvestment Act (ARRA) COBRA subsidy to state residents utilizing the mini COBRA program. Ohio222s 223mini COBRA224 offers coverage similar to the federal COBRA program for state residents laid off from small businesses ( Business Courier of Cincinnati, 3/1 ; Kaiser Health News, 3/1 ). Texas Mental Health Clinic Opens in Rural East Texas : A new health clinic, Total Health Family Medicine, offering both medical and mental health services, opened in Jasper, Texas. A spokesperson for the clinic SAMHSA222s Weekly Financing News Pulse: State and Local Edition March 3, 2010 3/3/2010 8 says it will help address the recent physician shortage in Jasper and shorten wait times for services ( KTRE, 2/23 ). Utah Update: Senate Passes Health Reform Bill : On March 1, the Utah Senate passed HB 294 to expand the state222s web based health insurance exchange to insurers offering coverage 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, a Senate amendment would place a 2016 expiration date on the risk adjuster222s authority. The amended bill now returns to the Utah House ; however, Senate President Michael Waddoups (R) says he may reconsider the bill for additional amendments. In related news, the Utah Legislature has also passed HCR 8 , urging Congress to pass only certain forms of national health care reform and seeking exemptions for certain state laws, regulations, and practices. HCR 8 now awaits Governor Gary Herbert 222s (R) signature or veto ( Desert News, 2/26 ; Salt Lake Tribune, 3/1 ). Committees Approve Bill to Eliminate Medicaid Waiting Period for Legal Immigrant Children : Utah Senate panels have advanced a bill ( SB 44) to the floor that would eliminate the current five year waiting period for legal immigrant children to receive benefits from Medicaid and the Children222s Health Insurance Program (CHIP). The federal government lifted the mandatory waiting period last year and 28 states have extended benefits to such children.Under SB 44, legal immigrant children would become eligible for Medicaid and CHIP beginning July 1, 2012 ( Salt Lake Tribune, 3/1 ; Kaiser Health News, 3/2 ). Virginia Budget Passes in House, Senate; Legislature to Reconcile Competing Plans: The Virginia General Assembly has passed biennial budgets in the Republican led House ( HB 30 ) and Democratic led Senate ( SB 30) that aim to address the state222s $4.2 billion shortfall. The House budget would cut $48 million of the $50 million requested by Governor Bob McDonnell (R); it proposes using relies on unapproved federal ARRA Medicaid funding for non health care expenses and $100 million in tobacco master settlement funds to cover expenses. The House also allocated $14 million to create 178 new Medicaid waiver positions and increase teacher salaries and rejected an amendment to restore funding for drug courts. The Senate budget includes $150 million in annual fees and relies on $350 million in extended federal ARRA Medicaid funding for six months. The Senate budget also allocates $816,000 to the Virginia Health Care Foundation, $639,000 to free clinics, and $481,000 to community health care centers. The budget preserves 500 mental health jobs and the services associated with those positions. The Virginia General Assembly must reconcile the two bills before March 13 ( Fairfax Times, 2/23 ; Rockbridge Weekly, 2/26 ; Virginia Politics, 2/25 ; Richmond Times Dispatch, 2/26 , Washington Post 2/26 ). Physician Survey Finds Medicaid Cuts Would Decrease Provider Capacity: The Medical Society of Virginia released a physician survey on February 23 finding that cuts of up to five percent in the state Medicaid budget would decrease provider capacity and increase barriers to care. The survey found that, under the cuts, providers accepting new Medicaid patients would decrease by 41.5 percent and that SAMHSA222s Weekly Financing News Pulse: State and Local Edition March 3, 2010 3/3/2010 9 22.3 percent of current providers would discontinue accepting any Medicaid patients. Medicaid currently reimburses physicians 63 to 64 cents of every dollar spent providing care to Medicaid patients. In addition, some physicians warn that cuts will result in increased use of emergency rooms, driving up long term costs ( Virginia Business, 2/23 ; Roanoke Times, 2/2 ). Washington Democrats Seek Cuts to Health and Human Services, Increase Cigarette Tax; Senate Approves Budget Plan: On February 23, Democrats in the Washington Legislature offered their budget proposals. The Senate proposed cutting $91 million from General Assistance, a program that provides health care grants for people with physical and mental disabilities, and spending $24 million to transition 5,400 clients to a managed care system. The Senate also proposed increasing the state cigarette tax by $1, generating $86 million to maintain coverage for more than 36,000 people on the state222s Basic Health Plan for lowincome residents. The House budget would spend $10 million to reform the General Assistance program and cut $56 million from the Basic Health Plan, discontinuing it if Congress does not extend the additional ARRA Medicaid funding through January 1, 2011. On February 27, the Washington Senate passed its budget plan on a 2519 vote ( AP via Seattle Times, 2/23 ; AP via Seattle Post Intelligencer, 2/27 ). West Virginia Update: State Rep. Withdraws Beer Tax Proposal, Introduces Legislation to Fund Substance Abuse Treatment with Medicaid Funds: After proposing a tax increase on beer to fund substance abuse treatment and prevention, State Delegate Don Perdue (D) introduced legislation ( HB 2100 ) that would use funds from a $374 million Medicaid reserve fund to finance additional treatment and prevention. The House Health and Human Resources Committee passed HB 2100 unanimously. Governor Joe Manchin (D) has criticized the bill for tapping Medicaid reserve funds that he believes the state will need to close a projected Medicaid deficit in 2013. Last year, West Virginia budgeted $26.6 million for substance abuse, with federal funds accounting for $15 million ( AP via Charleston Gazette, 2/28 ). Wyoming Update: Health Care Bills Initially Approved in House and Senate : On March 2, the Wyoming House tentatively passed a bill ( SF 61) that would establish a health care reform pilot project. The bill, sponsored by State Senator Charles Scott (R), would enroll 500 residents earning up to 200 percent of the FPL in a pilot program using individual contributions and $750,000 in state funds to create health savings accounts (HSAs). In addition, the Wyoming Senate preliminarily approved a bill ( HB 128) to allow residents to purchase health insurance from insurers in other states ( Star Tribune, 2/25 ; Star Tribune, 3/2 ).
