SAMHSA222s Weekly Financing News Pulse: State and Local Edition May 26, 2010 5/26/2010 1 SAMHSA222s Weekly Financing News Pulse: State and Local Edition Arizona California Connecticut Illinois Kansas Louisiana Maryland Massachusetts Mi chigan Missouri New Jersey New York North Carolina Ohio Oklahoma South Carolina Vermont West Virginia Wisconsin Wyoming To Subscribe to SAMHSA222s Weekly Financing News Pulse, please go to the following link and choose 223Health Care Financing224: https://service.g ovdelivery.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 May 26, 2010 5/26/2010 2 Around the States: State and Local Behavioral Health Financing New s Arizona Update: Voters Approve Temporary Sales Tax Increase, Avoid Further Health Care Cuts : On May 18, the Arizona voters approved Proposition 100 , tempo rarily increasing the state222s sales tax by one percent to 6.6 percent. Lawmakers project that the tax will raise $918 million in its first year, one third of which will fund public safety and health and human services. Approval of the measure avoided contingency cuts of $862 million to the state budget, including further cuts to health care funding. The tax expires on May 31, 2013 ( AP, 5/19 ; The Arizona Republic, 5/23 ) . California Audit Finds State Spends Nearly One - Quarter of Prison Health Care Funding on Specialty Care ; Inmate Health Care Legislation Advances : On May 18, California State Auditor Elaine Howle released a n audit which found that nearly one-quarter of the $2.1 billion California spent on prisoner health care between 2007 and 2008 went to specialty care services . The report found that 59,000 of the state222s 170,000 inmates received specialty care and that the cost for specialty care for inmates over age 60 averaged $42,000 annually. The audit als o noted that the health care costs for inmates incarcerated under the three -strike rule, under which three convictions for serious or violent felonies result in a mandatory sentence of 25 years to life, were 13 percent higher than costs for inmates not incarcerated under the rule. In related news, the California Senate Appropriations Committee approved legislation ( SB 1399) May 17 to allow incapacitated inmates that do not pose a threat to others to receive medical parole and o n May 20 the California Assem bly approved legislation ( AB 1817 ) establishing a process for the state to determine the necessity of certain health procedures and treatments in prisons. That bill now goes before the Senate. Lawmakers intend both measures to control prison health care costs ( San Francisco Gate, 5/19 ; Kaiser Health News, 5/19 ). LA County Hospital System Faces $204 Million Deficit : On May 18, Los Angeles County officials told the county board of supervisors that the county222s hospital system faces a projected $204 million deficit for the current fiscal year and a $600 million deficit for the coming fiscal year. The board asked the Los Angeles County Department of Health Services (DHS) to prepare a report within 30 days , outlining plans to close the deficit without additional federal funding. DHS had originally planned to close the deficit using federal funds and hospital provider fees ; however, those funding sources have not been finalized ( KPCC, 5/25 ; California Healthline, 5/19 ). Connecticut Bills Offering Cheaper Prescription Drugs to Localities, Greater Assistance after Claims Denials, and an Extension of COBRA Benefits Become Law : L egislation ( HB 5295) allow ing cities and towns to purchase prescription drugs through the state employee health insurance program officially became law on May 20. The law222s supporters say that it will lower municipalities222 prescription drug costs. O n May 5, Governor Jodi Rell (R) signed a measure ( HB 5235) requiring insurers to inform patients that they may contact the Connecticut Office of the Healthcare Advocate (OHA) if they believe that their claim s have been wrongly denied. The OHA helps patients file complaints and appeals with both insurers and the SAMHSA222s Weekly Financing News Pulse: State and Local Edition May 26, 2010 5/26/2010 3 state. The same day, Governor Rell also signed a measure extend ing the period during which unemployed workers can purchase health insurance through their former employer under COBRA from 18 to 30 months ( The Bridgeport News, 5/22 ; New Haven Register, 5/24 ). Illinois HHS Approves Medicaid Change, State to Receive $365 Million : On May 21, the Illinois Department of Healthcare and Family Services (D HFS) announced that the U.S. Department of Health and Human Services (HHS) approved Illinois222 State Plan Amendment to change its Medicaid program. Under the approved change, the state will cover low -income parents previously covered by the Children222s Health Insurance Program (CHIP) under the Medicaid program. The change will allocate an additional $365 in federal funding for Illinois222 Medicaid program ( KFVS, 5/21 ; Illinois Government News Network, 5/21 ). Democratic Legislators Propose $1.3 Billion in Cuts, Including $200 Million Cut to Medicaid : On May 24, 10 Democrat ic legislators , eight from the Illinois House and two from the Illinois Senate , proposed $1.3 billion in budget cuts. The proposed cuts include a $200 million reduction in Medicaid funding and a 5 percent cut to all state executive agencies ( Chicago Sun- Times, 5/24 ). Kansas D SRS Suspends Voluntary Admissions to the State222s Three Psychiatric Hospitals Due to Overcrowding : On May 19, the Kansas Department of Social and Rehabilitation Services (D SRS) suspended voluntary admissions to the state222s three hospitals for the mentally ill because all three are at least nine patients over capacity . The affected hospitals are Larned State Hospital, Osawatomie State Hospital, and Rainbow Mental Health Facility and have capacities of 76 beds, 176 beds, and 50 beds respectively. The hospitals are still accept ing patients ordered to the facilities by the courts or escorted by the police ( Kansas Health Institute, 5/24 ; Kaiser Health News, 5/25 ). KHPA Report Projects National Health Care Reform Law Will Lower Costs for Individuals and Small Busin esses in Kansas: On May 18, the Kansas Health Policy Authority (KHPA) released a report analyzing the impact of the national health care reform law on insurance and health care spending in Kansas. The report projects that Kansas222 Medicaid program will save $206 million between 2014 and 2019 and that 131,000 Kansas residents will gain health coverage through Medicaid or CHIP as a result of national reform. If the state makes no substantive changes beyond those required under the national law , the report projects that state costs will be between $2 million and $5.3 million annually after 2019, depending on the number of residents remaining uninsured. However, if the state increases Medicaid reimbursements by 5 percent, the report projects that state costs will reach $32.9 million to $36.3 million annually. The report also estimates that the overall costs of health coverage f or small businesses in Kansas will decrease under refor m, as more employees become eligible for Medicaid and federal insurance subsidies ; however, costs for large businesses will increase . Finally, t he report projects that most residents covered through individual plans will see premium costs decrease as a result of reform ( Kansas Health Institute, 5/18 ; Kaiser Health News, 5/20 ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition May 26, 2010 5/26/2010 4 Louisiana Update: House Approves Legislation to Permit Legislative Review of Contracts Privatizing Mental Health Services : On May 20, the Louisiana House approved legislation ( HB 1443) that would give the Louisiana House and Senate Health Care Committees and the Louisiana Legislative Joint Budget Committee the right to review and reject any privatization contract involving the state222s psychiatric hospitals. T he bill would apply to all contracts lasting three years or more and would require the Louisiana Department of Health and Hospitals (DHH) to consider a contractor222s willingness to hire state workers as part of their contract evaluation process. The new review authority would extend to the two contracts to privatize mental health services at Central Louisiana State Hospital in Pineville and the Jackson campus of the Eastern Louisiana Mental Health System that Governor Bobby Jindal222s (R) administration plans to implement in the f iscal year beginning in July to save $6 million. The bill now goes before the Louisiana Senate ( AP via Business Week, 5/20 ; Kaiser Health News, 5/21 ). Maryland New Treatment Center for Veterans with TBI and Psychological Conditions to Open in June : On June 24, the National Intrepid Center of Excellence will open at the National Naval Medical Cen ter in Bethesda, Maryland. The center will offer treatment to veterans with tra umatic brain injuries (TBI) and psychological conditions and will utilize long-term follow -up care to ensure continuity of care after the soldiers leave the military. The cent er was built and funded with $65 million in private money and will be operated by the U.S. Department of Defense (DOD) ( Army Times, 5/20 ). Howard County Council A dopts $1.4 Billion Budget, Maintains Healthy Howard Program : On May 19, the Howard County Council a dopted a $1.4 billion budget. The budget maintains funding for the Healthy Howard health care access program for low - income residents, after an attempt to c ut the budget for the program by $300,000 ( The Baltimore Sun, 5/19 ). Massachusetts Update: Senate Approves Legislation to Provide Health Insurance Premium Relief for Small Businesses : On May 18, the Massachusetts Senate approved legislation (S 2437) aimed at reducing health care costs for small businesses. The measure requires insurers to file proposed rate increas es three months before th ey take effect, allowing the Massachusetts Division of Insurance (DOI) sufficient time to review them. The measure would require insurers to have medical loss ratios of at least 88 percent one year after the legislation is enacted and 90 percent every yea r thereafter . The bill would establish one annual open enrollment period for purchasing insurance on the individual market to combat the practice of residents purchasing insurance prior to incurring costly medical expenses and dropping coverage after rece iving their care . The measure would also allow businesses with 50 or fewer employees to form cooperatives to purchase insurance and would create new metrics to help the public compare insurance plans based on cost and quality. Furthermore, to build upon the 35 percent federal subsidy available to businesses with fewer than 25 employees with an average salary of less than $50,000 under the national health care reform law, the bill would offer small businesses a 5 percent tax credit for implementing programs that emphasize employee wellness. Finally, the legislation would SAMHSA222s Weekly Financing News Pulse: State and Local Edition May 26, 2010 5/26/2010 5 raise $100 million from the state222s wealthier hospitals to reduce small businesses222 insurance coverage costs by a n estimated 2.5 percent ( AP, 5/19 ; Cape Cod Times, 5/19 ; Kaiser Health News, 5/19 ) . Update: House Approves Legislation to Overturn State Ban on Drug Coupons : On May 19, the Massachusetts House approved legislation ( HB 4689) that would allow drug manufacturers to provide patients with coupons for drugs, a practice that state law currently prohibits. Critics argue that the program would drive people to use pricier medications but the bill222s sponsor, State Representative Peter Koutoujian (D), argues that the issue would not arise in Massachusetts because residents are required by law to purchase generic drugs when they are available. The measure now goes before the Massachusetts Senate ( The Daily News Tribune, 5/24 ). Michigan Detroit City Council Approves Budget, Cuts Health Care Funding : On May 21, the Detroit City Council approved a $3.1 billion budget , $31.8 million less than the budget proposed by Mayor Dave Bing . The council222s budget c uts funding for the Department of Health and Wellness Promotion by $2.39 million and o fficials warn that some of the cuts could jeopardize $4.2 million in federal health grants. The budget now goes before Mayor Bing ( Detroit Free Press, 5/22 ). Missouri Metropolitan St. Louis Psychiatric Center Stop Treating Emergency and Acute - Care Psychiatric Patients : On July 1, Metropolitan St. Louis Psychiatric Center wil l no longer treat emergency and acute- care psychiatric patients. The change comes as part of broader state cost - cutting maneuvers ( AP via CNBC, 5/19 ) . New Jersey Governor Rescinds Proposed Cuts to Prescription Drug Programs : On May 19, Governor Chris Christie (R) rescinded proposed cuts to prescription drug programs for the elderly and disabled. Originally contained in his proposed budget , t he cuts would have instituted a $310 deductible and higher copayment s for beneficiaries in the Pharmaceutical Assistance for the Aged and Disabled (PAAD) and Senior Gold. Governor Christie said greater -than -expected savings from the national health care reform law and greater utilization of generic drugs by program beneficiaries eliminated the need for the cuts ( The Star -Ledger, 5/20 ) . New York Syracuse VA Medical Center Relocates to Accommodate M ore Patients : The Syracuse Veterans222 Affairs (VA) Medical Center relocated its outpatient mental health services to a larger location to accommodate more patients. The VA spent $2.3 million to renovate the new building which offers post -traumatic stress disorder (PTSD) treatment , substance abuse services, and vocational counseling for veterans, as well as a program for homeless veterans, a general outpatient mental health clinic, a suicide prevention program, and other services. The Syracuse VA provides approximately 3,500 veterans with outpatient mental health services annually and will convert t he space previously used for outpatient services into an 18 -bed inpatient mental health unit ( Post -Standard, 5/24 ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition May 26, 2010 5/26/2010 6 North Carolina Senate Approves $19 Billion Budget, Restores Community Mental Health Funding, Cuts Medicaid In- Home Care Programs : On May 20, the North Carolina Senate approved a $19 billion budget, $150 million less than the budget Governor Beverly Perdue (D) proposed on April 20. The Senate plan contains the governor222s proposal to eliminate two programs that offer in -home personal care services to 38,000 Medicaid pati ents, instead offering two new programs serving only 5,000 patients. The budget also restores $40 million for community mental health programs that was cut from the previous year222s budget ( WTVD, 5/21 ; News Observer, 5/23 ) State Senator Proposes Constitutional Amendment Blocking Individual Insurance Mandate : On May 13, State Senato r James Forrester (R) introduced a proposed constitutional amendment ( SB 1157) that would bar any rule or law that compels participation in a health care system and prohibit imposing penalties or fines for not carrying insurance. The proposed amendment is a challenge to the individual insurance mandate contained within the national health care reform law, which requires individuals to carry insurance or face a tax penalty . The measure now goes before the North Carolina Senate Committee on Rules and Operati ons ( Washington Daily News, 5/20 ; Kaiser Health News, 5/20 ) . Ohi o State Representative Introduces T wo Bills Altering FFS Medicaid : On May 17, State Representative Barbara Sears (R) introduced two bills altering fee -for-service (FFS) Medicaid. HB 513 would create a disease management program within FFS Medicaid, emphasizing improved communication between providers and patients to ensure that patients have the knowledge, medicine, and supplies to prevent and minimize complications from serious conditions. HB 514 would create a case management program within FFS Medicaid to help patients and providers plan, coordinate, and evaluate care. Neither bill has a designated funding source and both bills have been referred to the House Finance and Appropriations Committee . Of the 2.1 million Ohioans enrolled in Medicaid, 28 percent are in FFS plans ( Med City News, 5/21 ). Richland County Commissioners Approve Levy for Mental Health Board: On May 20, the Richland County Commissioners unanimousl y voted to place a measure on the November ballot to increase the current levy for the Richland County Mental Health Board. The current $1.5 million levy does not expire until 2012; however, the replacement levy would extend it for f ive years and raise property taxes on homes worth $100,000 by $12.34 annually . The new levy would raise an additional $700,000 designed to compensate for state and federal funding cuts. If voters do not approve of the measure in November, the Mental Heal th Board is allowed to place the measure up for two additional votes by law, the last of which would come in November 2011, two months before the current levy expires ( Mansfield News Journal, 5/21 ) . Oklahoma Legislature Approves $6.68 Billion Budget with Minimal M/SU Cuts: On May 21, the Oklahoma Legislature approved a $6.68 billion budget that cuts most state agency budgets by 7 percent but cuts the Oklahoma Departmen t of Mental Health and Substance Abuse Services funding by less than 1 SAMHSA222s Weekly Financing News Pulse: State and Local Edition May 26, 2010 5/26/2010 7 percent. The budget also includes a 1 percent fee on paid insurance claims which would be paid by insurers, which lawmakers project will raise $78 million annually. The money raised from the fee will be placed into a fund 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 90 days after the legislature adjourns on May 28; however, lawmakers project that t he delay ed enactment will result in the loss of $52 to $78 million in potential revenue. The budget now go es to Governor Brad Henry (D) ( The Oklah oman, 5/22 ; The Oklahoman, 5/21 ; AP, 5/23 ; The Enid News and Eagle, 5/21 ; Houston Chronicle, 5/24 ; Kaiser Health News, 5/25 ; The Oklahoman, 5/24 ). South Caroli na House Approves $50 Million in Cuts to $5 Billion Budget , Health Care Affected : On May 19, the South Carolina House approved $50 million in cuts to its $5 billion budget, mostly affecting health care funding. The cuts eliminate state-funded cancer screenings, end two prescription drug programs that help patients purchase prescriptions , and end a prescription drug program for individuals with AIDS . The cuts also l imit Medicaid recipients to three prescriptions monthly to save $10.7 million and cap Medicaid enrollment for children whose families earn more than 150 percent of the federal poverty level (FPL) starting July 1 to save $1.7 million. The cuts come after Governor Mark Sanford (R) vetoed $20 million in new court fees designed to raise state revenue . The House and Senate must now negotiate a single budget ( The State, 5/25 ; The State, 5/20 ). Vermont Commonwealth Fund Releases Report on ACO Pilot Programs : On May 14, the Commonwealth Fund released a report outlining the efforts of three Vermont health care provider organizations to create accountable care organizations (ACOs) that will serve as pilot programs within the national ACO Learning Network. The report examines the experiences of the provider organizations in establishing ACOs and offers preliminary recommendations for successful ACO implementation ( Commonwealth Fund, 5/14 ; Kaiser Health News, 5/21 ). West Virgini a New Federal Rule Ends Two -Tiered Medicaid Program : Under a new federal rule, West Virginia must end its Mountain Health Choices Medicaid program and revert to a single set of Medicaid benefits. Mountain Health Choices offer s Medicaid beneficiaries enhanced benefits if they sign a pledge committing to particular behaviors, such as more regular doctor visits, while Medicaid beneficiaries that do not sign the pledge receive fewer benefits. The new federal rule affects West Virginia and 10 other states , and does not allow such a two - tiered system. The 20,000 adults and nearly 152,000 children currently enrolled in Mountain Health Choices will receive benefits through traditional Medicaid once the program is dis solved ( Charleston Daily Mail, 5/19 ). Wisconsin Milwaukee County Reports Projected Deficit of $6.6 Million, Behavioral Health Division Deficit $3.4 Million : On May 20, Milwaukee County Controller Sc ott Manske released a report projecting that Milwaukee County222s deficit will reach $6.6 million by the end of the current fiscal year. The largest SAMHSA222s Weekly Financing News Pulse: State and Local Edition May 26, 2010 5/26/2010 8 departmental shortfall is at the Milwaukee County Behavioral Health Division, which will face a projected $3.4 million deficit ( Milwaukee Journal Sentinel, 5/20 ). Wyoming Governor Forms Panel to Determine Impact of Reform on State Programs and Advise on Implementation : Gove rnor Dave Freudenthal (D) formed a State Agency Leadership Team to analyze the impact of the national health care reform law on state programs and their beneficiaries and to advise the governor on health care reform implementation. Meredith Asay, a policy advisor to Governor Freudenthal, will lead the panel which will be composed of the directors of state agencies that will be affected by the law, including the Wyoming Department s of Health, Insurance , Family Services, Education , and Workforce Services, th e Wyoming Department of Administration and Information222s Group Health Insurance program , and the Office s of Chief Information Officer Bob von Wolffradt , and Attorney General Bruce Salzburg . The team will develop a short- term work plan outlin ing the necessary considerations and actions for health care reform implementation through January 1, 2011 ( Wyoming Business, Report, 5/19 ; Kaiser Health News, 5/20 ).