SAMHSA222s Weekly Financing News Pulse: State and Local Edition May 5, 2010 5/5/2010 1 SAMHSA222s Weekly Financing News Pulse: State and Local Edition California Co lorado Florida Illinois Kansas Maine Massachusetts Minnesota Missouri New York South Carolina Utah Washington West Virginia Wisconsin To Subscribe to SAMHSA222s Weekly Financing News Pulse, please go to the following link and choose 223Health Care Financing224: https://service.govdelivery.com/service/multi_subscribe.html?code=USSAMHSA&origin=http://www.samhsa.go v/enetwork/success.aspx For quest ions or comments, please contact Kevin Henness y ( kevin.hennessy@samhsa.hhs.gov ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition May 5, 2010 5/5/2010 2 Around the States: State and Local Behavioral Health Financing New s California Anthem Blue Cross Withdraws Proposed Rate Increases, Plans to Revise : On April 29, Anthem Blue Cross, a subsidiary of WellPoint, Inc. , announced that it withdrew its pending proposal for premium increases for individual policy holders in California . Anthem officials said they made the decision following the release of a report Axene Health Partners of Winchester prepared for state regulators that found Anthem222s proposed increases overstated future medical costs. Axene222s report said if Anthem fixed the calculations, it could cut proposed rate increases to an average of 15 percent ; t heir original proposed increases averaged 25 percent. Anthem will file new proposed rate increases for individual policyholders this month ( Kaiser Health News, 4/30 ; Wall Street Journal, 4/30 ; AP, 4/30 ; Los Angeles Times, 4/30 ) . Santa Clara County Executive Proposes $4.4 Billion Budget, Closes $223 Million General Fund Deficit : On May 3, Santa Clara County Executive Jeff Smith proposed a $4.4 billion budget for the next fiscal year, with measures to close a $223 million general fund deficit. The proposed budget includes $3 million in new funding to the Public Health Department and $2 million to the department to pay for programs the state no longer funds, such as the HIV/AIDS program. Smith222s proposed budget includes $500,000 in new funding for the Department of Drug and Alcohol Services, and $2.5 million to pay for drug treatment that the state no longer provides because of Proposition 36, a state mandate to increase local funding for drug treatment. The proposed budget also uses federal stimulus funding to increase reimbursements by California222s Medicaid program, Medi -Cal, to $33.8 million ( Mercury News, 5/3 ). Colorado Senate Committee Approves Treatment for Drug Offenders Bi ll: On April 30, the Colorado Senate Appropriations Committee approved legislation ( HB 1352) that reclassifies drug use as a Class 2 misdemeanor from its status as a Class 6 felony. The legislation requires the Colorado Division of Criminal Justice to evaluate the cost savings from the change annually, and appropriates the savings to the Drug Offender Treatment Fund. Stakeholders w ill develop a treatment program for both substance abuse and co -occurring disorders. The Colorado House approved the legislation on April 15. The bill is now goes before the full Senate ( Colorado General Assembly, 5/4 ; The Denver Daily News, 4/26 ; The Coloradoan, 4/26 ). Florida Legislature Approves $70.4 Billion Budget : On April 30, the Florida House and Florida Senate approved a $70.4 billion budget for the fiscal year beginning July 1. The budget increases health care funding by 9.35 percent, mostly to accommodate an anticipated additional 300,000 individuals who will be eligible for Medicaid. The budget also cuts Medicaid reimbursement rates for hospitals , excluding children222s hospitals, and nursing homes by seven percent. The cut will be reduced to five percent if the U.S. Congress approves an extension of additional Medicaid funding contained in the American Recovery and Reinvestment Act . The budget now goes to Governor Charlie Crist (R) for his signature ( AP via The Miami Herald, 4/30 ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition May 5, 2010 5/5/2010 3 Senate Approves Legislation Regulating Pain -Management Clinics : On April 29, the Florida Senate approved legislation (S 2272) that gives the state greater oversight of pain-management clinics. The bill increases state regulation of the clinics, stiffens penalties the state may impose upon them, prevents pain -management clinics from advertising or promoting the use and sale of controlled substances, and bars pain -management clinics from dispensing more than a 72 -hour supply of controlled substances to patients paying with cash, checks, or credit cards . Patients can still receive more than a 72-hour supply if they pay through insurance or workers -com pensation. The measure now goes to Governor Charlie Crist (R) for his signature ( Health News Florida, 4/30 ; Kaiser Health News, 4/30 ). Illinois Wellcare Discovers It Overbilled Medicaid, will Repay State $1 Million : Wellcare Health Plans Inc. , Illinois222 largest Medicaid HMO, discovered that it overbilled the state222s Medicaid program by 0.2 percent of premium amounts from July 2006 to June 2009. Wellcare notified the state of the overbilling and intends to repay the state the approximately $1 million it overcharged. The state has also put out a request for proposals for Medicaid HMOs to participate in a pilot program offering medical care to 40,000 seniors and adults with disabilities in Cook, DuPage, Kankakee, and Will counties. Proposals are due on May 14, and state officials intend to begin the pilot in the fourth qua rter of this year ( Chicago Breaking Business, 4/28 ). Advocate Good Shepherd Hospital to Close Behavioral Health Unit : On May 3, Advocate Go od Shepherd Hospital announced that it would no longer accept patients to its behavioral health program. After the patients currently receiving care at the inpatient unit are discharged, the hospital will close the six-bed unit ( Northwest Herald, 5/4 ). Kansas Senate Votes against Considering Health Care Freedom Amendment: On April 28, the Kansas Senate voted against considering a constitutional amendment called the 223Health Care Freedom Amendment 224 that would prohibit the state from requiring individuals or businesses to purchase health insurance, and thereby exempting them from such mandates in the federal Patient Protection and Affordable Care Act . The amendment would have put the measure before the Kansas voters in November ( AP, 4/30 ). Maine Kennebec County Jail Begins DSAT Program : In June, Kennebec County Jail will begin a pilot program of a 20-bed unit utilizing differential substance abuse treatment (DSAT). DSAT targets inmates who commit crimes because of their substance abuse, and consists of six weeks of intensive psychological and behavioral counseling. The program also offers educational, employment, and housing support upon release. Officials intend to ex pand the program to 60 beds when it is operational, and they say they want to make it available regionally for inmates at other jails as well. County officials say the program is the first of its kind at the county jail level, and it is modeled after a pr ogram in the state prison system. Kennebec County Jail applied for a $750,000 grant from the U.S. Department of Justice222s (DOJ) Bureau of Justice Assistance (BJA) to support training, administration, increased data collection, and additional staffing to support admissions and participants 222 transition back into the community. SAMHSA222s Weekly Financing News Pulse: State and Local Edition May 5, 2010 5/5/2010 4 However, the jail will proceed with the program using current funds if it does not receive the grant. The Co -Occurring Disorders Court will assist with the re -entry aspect of the pro gram. Maine Pre -Trial Services, the National Alliance on Mental Illness (NAMI), and Hornby Zeller Associates are collaborating with the county for the program. ( Morning Sentinel, 5/4 ). DHA Begins Voucher Program to Cover Part -Time Workers: On May 1, Maine222s Dirigo Health Agency (DHA) began offering vouchers for insurance premiums for part - time employees who do not have coverage through an employer222s insurance plan and who cannot qualify for government health care plans. The program will cost $8 million annually, and is funded through a federal grant Maine received last fall. To qualify, employers must have more than 50 employees, be willing to pay at least five percent of the insurance premium costs of part -time workers, and have at least 75 percent of their employees participating in their insurance plans. Workers must work 35 hours or less weekly and earn less than $32,490 annually. Part - time employees who participate in the voucher program will pay a monthly premium of $30 to $330, dependent upon their income and assets. Participants may pay additional premiums to get coverage for family members, in which case the income requirements are higher. Due to limited funding, DHA expects to offer the vouchers to only 3,000 individuals and family members, out of a projected 20,000 who would qualify. DHA will add participants at a rate of 75 per month on a first -come, first -served basis ( The Portland Press Herald, 5/3 ). Massachusetts DOJ Opens Antitrust Probe into Partners HealthCare : On April 19, the U.S. Department of Justice (DOJ) sent letters to Partners HealthCare System Inc. , Blue Cross and Blue Shield of Massachusetts, Harvard Pilgrim Health Care, and Tufts Health Plan demanding documents pertaining to Partners222 contracting and other practices in Eastern Massachusetts health care markets. DOJ is conducting the probe to deter mine whether Partners222 practices violate the Sherman Antitrust Act . DOJ requested specific information on Partners222 contract negotiation and how much insurers reimburse Partners222 Boston teaching hospitals. In March, Massachusetts Attorney General Martha Coakley222s office released a report that found that the most prominent hospital groups in Massachusetts used their money, clout, and member base to obtain higher reimbursement fees from insurers. Partners and the insurers have until May 19 to respond to DOJ222s request ( The Boston Globe, 4/29 ; Kaiser Health News, 4/29 ). Minnesota Healthier M innesota Clinic Fund Awards Upper Mississippi Mental Health Center $150,000 Grant to Implement New Service Delivery Model : The Healthier Minnesota Clinic Fund, an independent f oundation that seeks to improve health care for the poor, minorities, and the underserved, awarded the Upper Mississippi Mental Health Center (UMMHC) a $150,000 grant to implement a new service model called the Access Clinic. The Access Clinic will move a way from the traditional appointment based scheduling of services toward same -day services at UMMHC222s Park Rapids and Bemidji locations. The move comes in light of high rates of cancelled appointments at UMMHC. The Access Clinic is model ed after the Nat ional Council for Community Behavioral Healthcare222s Access and Retention Quality Improvement Initiative. The grant funds phased implementation of the service model and a SAMHSA222s Weekly Financing News Pulse: State and Local Edition May 5, 2010 5/5/2010 5 public information and awareness initiative. UMMHC officials intend to offer the ser vice four days weekly by March 2011 ( The Bemidji Pioneer, 5/2 ). Senate Releases Proposed HHS Cuts : On April 29, the Minnesota Senate released its proposal for $114 million in state budget cuts to health and human services for the remainder of the biennium. The proposal includes $4 million in cuts for mental health services, compared to the $16 million and the $22 million in mental health service cuts proposed by Governor Tim P awlenty (R) and the Minnesota House , respectively . Like the House proposal, the Senate proposes to expand Medicaid this year to draw down $1 billion in federal funds through 2013 to help cover the health care costs of low income, childless adults currentl y covered by General Assistance Medical Care. Also like the House bill, the Senate version maintains funding for the state-operated system of residential mental health facilities, whereas Governor Pawlenty proposes cutting funding for the se facilities by $17 million. The proposal now goes before committee ( Pioneer Press, 4/29 ). Missouri Update: Legislature Approves $23.3 Billion Budget : On April 29, the Missouri House and the Missouri Senate approved a $23.3 billion operating budget for the fiscal year beginning July 1. The budget does not alter Medicaid eligibility, but cuts services for those who make too much to qualify for Medicaid. Legislators saved $6.4 million by eliminating in-home care for the elderly and disabled who do not qualify for Medicaid. Other cuts included community programs for the developmentally disabled, substance abuse services and psychiatric services for those who do not qualify for Medicaid. The approved budget is $484 million less than the one proposed by Governor Jay Nixon (D) ( St. Louis Post- Dispatch, 4/29 ). Governor Signs Bill Expediting Insurance Claims into Law : On April 29, Governor Jay Nixon (D) signed legislation ( HB 1498) into law , requiring insurance companies to expedite payment of claims to health care providers. The new law clearly defines providers222 responsibilities in filling out claims, requires insurers to pay or deny claims within 45 days of receipt, bars insurers from suspending claims, and imposes a daily insurer penalty of one percent of the claim for overdue claims . A 2009 report by the Missouri Department of Insurance (DOI) found that 26 percent of claims at Missouri hospitals were 90 days or more overdue ( St. Louis Globe - Democrat, 4/27 ; Kaiser Health News, 4/28 ). New York Comptroller222s Audit Finds Medicaid Overpaid Out - of -State Hospitals by Over $150 Million : On May 3, New York Comptroller Thomas DiNapoli222s office released three audits of Medicaid overpayments. The audits found that New York overpaid more than $150 million to out -of -state hospitals because of New York222s billing system and policies, including $21.4 million due to outdated reimbursement information. The audits also found that New York overpaid in -state hospitals $74.5 million for patients that were discharged and then readmitted for the same or similar treatment within a 31 day period ( The Business Review, 5/3 ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition May 5, 2010 5/5/2010 6 DOH to Appeal Ruling that it must Pay Niagara County $778,212 for Mental Health Services Funded through Medicaid: The New York Department of Health (DOH) filed notice that it will appeal Supreme Court Justice Richard C. Kloch Sr.222s February ruling that the state must pay Niagara County $778,212 for mental health services reimbursed by Medicaid. That ruling is the second of its kind in the county222s favor. The previous ruling last year said the state must pay the county $440,000, plus interest , for mental health services for Medicaid patients. In both cases, the state argued that it does not have to reimburse the county because they are above the cap placed on the growth of the county share of Medicaid under New York law ( The Buffalo News, 5/3 ). South Carolina Teen Substance Abuse Treatment Center Opens in Greenville County : On April 30, a substance abuse treatmen t facility for teens, The Phoenix Academy, opened in Greenville County. The facility has 16 beds and will house teens for three to four months. Teens will receive counseling and experiential therapy at the facility, and the program will track teens after they leave to measure success. The Phoenix Academy was paid for with state funds and cost $6 million to build ( WSPA, 4/30 ). Utah Governo r Signs Nine Bills into Law to Combat Prescription Drug Abuse: Governor Gary Herbert (R) signed nine bills into law last week aimed at greater enforcement of drug laws targeted at prescription drug abuse. The new laws reduce the availability of prescripti on drugs for abuse; increase public awareness of the negative physical and psychological effects of prescription drug abuse and the legal sanctions avai lable to prosecute those who abuse them; decrease tolerance of non-medical use of prescription drugs; ad d the muscle-relaxer Soma to the state222s controlled substance list; make the penalty for selling fake versions of illegal drugs the same as selling the real drugs; and establish a network for disposal of unwanted prescription drugs, among other changes. The laws do not address demand for prescription drugs ( Deseret News, 5/3 ). Washington Governor Signs Operating Budget : On May 4 , Governor Chris Gregoire (D) signed a supplemental operating budget to cover the $2.8 billion shortfall in Washington222s two year, $31 billion budget. The operating budget makes no additional cuts to Washington222s Basic Health Plan, and includes a net fundin g increase of $26.5 million for mental health, long -term care, and programs for the developmentally disabled. Governor Gregoire vetoed some portions of the bill, including funding transfers from the Washington Insurance Commissioner ( The Seattle Times, 5/4 ). West Virginia DHHR to Transfer SSI Recipients to Managed Care : The West Virginia Department of Health and Human Resources (DHHR) plans to transfer the medi cal and behavioral health benefits of Supplemental Security Income (SSI) recipients from fee -for-service plans to managed -care plans in an attempt to integrate behavioral health and physical health services. DHHR plans to begin the transition in July but will not alter recipients222 benefits until 2011. SSI recipients who qualify for Medicare and those who have long-term care services will not be affected by the change ( The Charleston Gazette, 5/1 ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition May 5, 2010 5/5/2010 7 Wisconsin Update: Governor Signs M/SU Parity Bill into Law : On April 29, Governor Jim Doyle (D) signed a bill (SB 362) into law to augment the federal Wellstone- Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). MHPAEA does not mandate M/SU coverage but requires that all employer - sponsored group health plans with 51 or more employees that offer M/SU coverage do so on an equal basis with general health care. Wisconsin law previously required employers to offer a minimum of $7,000 of M/SU coverage annually. Wisconsin222s new law requires group health plans for businesses with 10 or more employees to offer M/SU coverage at level equal to that of general health care. If businesses222 health insurance premiums increas e two percent in the first year or one percent the following year, businesses may opt out and offer coverage at the previous level of $7,000 annually. Lawmakers project that the law will affect 700,000 individuals ( Green Bay Press -Gazette, 5/3 ; WUWM, 4/30 ; Kaiser Health News, 5/3 ).