WeeklyFinancingNewsPulseStateandLocalEditionfinal20091118.pdf (PDF | 253.82 kb)
SAMHSA222s Weekly Financing News Pulse: State and Local Edition November 18, 2009 11/18/09 1 SAMHSA222s Weekly Financing News Pulse: State and Local Edition Alabama California Delaware Florida Georgia Hawaii Iowa Louisiana Massachusetts Mississippi Missouri New Mexico New York North Carolina Oklahoma Oregon Pennsylvania Tennessee Washington West Virginia Wyoming PLEASE NOTE: SAMHSA222s Weekly Financing News Pulse will not be produced over Thanksgiving; the next State and Local edition will be distributed on Wednesday, December 2nd. To Subscribe to SAMHSA222s Weekly Financing News Pulse, please go to the following link and choose 223Health Care Financing224: https://service.govdelivery.com/service/multi_subscribe.html?code=USSAMHSA&origin=http://www.samhsa.go v/enetwork/success.aspx For quest ions or comments, please contact Kevin Hennessy ( kevin.hennessy@samhsa.hhs.gov ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition November 18, 2009 11/18/09 2 Around the States: State and Local Behavioral Health Financing News Alabama Board of Education Recommends Budget, Suggests Limiting Health Insurance Expenses : On November 12, the Alabama Board of Education issued budget recommendations to Governor Bob Riley (R) for the 2010- 2011 school year, including recommending maintaining level funding for the educators222 health insurance budget. Because keeping health benefits at their current level would require an additional $238 million, compliance with the recommendation would entail reducing benefits or increasing employee premium contributions. Any changes to the health plan require the approval of the governor and the Alabama Legislatur e . Since 1986, educators have paid $2 a month for their insurance plans, far less than in equivalent public or private plans ( AP, 11/13 ). California T uolumne County Behavioral Health Department to Cut Staff : At the recommendation of County Behavioral Health Director Bea Readel , the Tuolumne County Board of Supervisors approved two staff layoffs and the elimination of a vacant position at the Department of Behavioral Health. The department, which is largely funded by the state222s Mental Health Services Act, expects revenue to decline by 20 percent over the next three years. Even with the latest round of staff cuts, which come on top of 16 layoffs this summer, the department estimates a $369,000 shortfall for next fiscal year and a $1.3 million shortfall for fiscal year 2012 - 2013 ( Union Democrat, 11/1 3 ; My Mother Lode, 11/10 ). Delaware State Estimates Effects of National Health Care Reform Legislation on Medicaid: Delaware officials estimate that, under the Senate Finance Committee222s health care reform bill ( SB 1796), the state222s Medicaid expenditures will increase $21 million in FY2014 and continue to increase in the following fiscal years. State officials note that Delaware would be among a select group of states (AZ, HI, ME, MD, MA, MN, NY, PA, VT, WA, WI, and DC) with more generous pre - expansion Medicaid eligibility that receive less assistance than other states. In addition, Delaware officials estimate that the Medicaid expansion under the House222s health care reform bill ( HR 3962 ) would cost the state nothing before FY2015 and $11.8 million annually beginning in FY2015. The state budget officers also note that all state Medicaid programs are treated equally under the House bill ( New s Journal, 11/16 ). Florida State Legislators Ask U.S. Senators to Increase Florida222s Medicaid FMAP : Florida State Senators Jeff Atwater (R) , J.D. Alex ander (R), Durrell Peaden (R), and Nan Rich (D) authored a letter to U.S. Senators Bill Nelson (D - FL) and George LeMieux (R- FL) highlighting Florida222s projected Medicaid costs after American Recovery and Reinvestment Act (ARRA) funding expires, outlining overarching problems with the Medicaid Federal Medical Assistance Percentage (FMAP) system, and seeking an increase in the state222s FMAP. The state senators contend that, after the ARRA FMAP increase expires December 31, 2010, Florida222s share of Medicaid co sts will increase $668 million while the state attempts to close a projected $2.6 billion budget deficit. In addition, the state legislators note that an underlying flaw in the FMAP calculations cost the state an estimated $459.6 million; the receipt of insurance money following SAMHSA222s Weekly Financing News Pulse: State and Local Edition November 18, 2009 11/18/09 3 the 2004 and 2005 hurricane seasons artificially increased the state222s economy causing reductions to the state222s FMAP between 2007 and 2009. The state legislators asked Sens. Nelson and LeMieux to press for continued temporary FMAP assistance for the state as well as a more comprehensive overhaul of future FMAP calculations ( Florida Health News, 11/11 ; Kaiser Health News, 11/12 ; AP via Miami Herald, 11/11 ). State to Implement Medicaid EHRs : The Agency for Health Care Administration222s (AHCA) State Center for Health Information and Policy Analysis plans to begin implementing electronic health records (EHRs) for 1.6 million Medicaid patients in Florida. Under the system, which would not cover Medicaid managed care beneficiaries, EHRs would be available for free to 80,000 doctors, clinics, and hospitals throughout the state and include information on office visits, hospitalizations, diagnoses, prescriptions, immunizations, and lab results derived from claims da ta. The state expects to implement the EHRs early next year ( Florida Health News, 11/13 ; Kaiser Health News, 11/16 ). Georgia Data Show Medicaid/CHIP Care Management Program Saved State Up to $140 Million : Data from the Georgia Department of Community Health (DCH) found that the state222s Medicaid and the Children222s Health Insu rance Program (CHIP) care management organization (CMO) program saved Georgia $123 to $140 million over the past fiscal year. In addition, DCH estimates indicate the program could save the state between $135 million and $580 million in FY2012. The CMO program directs beneficiaries from Medicaid and PeachCare for Kids, Georgia222s CHIP, to managed care programs designed to increase their face time with case managers and reduce hospitalizations ( August Chronicle, 11/16 ; Kaiser Health News, 11/16 ). Hawaii Substance Abuse Treatment Facilities Receive Grants : The Hawaii Community Foundation awarded $27,131 in grants from the Gwenfread Elaine Allen Fund to Aloha House, Maui Youth & Family Services, and Malama Family Recovery Center. The funding will help the three non - profit substance abuse treatment agencies merge technology systems to share inf ormation, reduce administrative costs, and increase efficiency. The three organizations partnered in 2008 to streamline services and cut costs ( Maui News, 11/15 ). Iowa State to Receive $1.2 Million in Medicaid Fraud Settlements : As part of a broader lawsuit brought by numerous state Medicaid programs against 78 pharmaceutical companies, the Iowa Attorney General announced that the state recovered $4.3 million through settlements with eight companies. Of the $4.3 million recovered thus far, 62 percent compensates the federal government for its share of the Medicaid losses, 12 percent pays attorneys fees, and the remaining 11 percent 227 $1.2 million 227 goes to a state pharmaceutical settlements fund, which state legislators may allot to a number of health care programs ( Des Moines Register, 11/14 ). Louisiana Jindal Administration to Fund 24 Adolescent Substance Abuse Treatment Slots : Governor Bobby Jindal (R) announced that the Swanson Correctional Center for Youth in Monroe will receive $6.2 million in SAMHSA222s Weekly Financing News Pulse: State and Local Edition November 18, 2009 11/18/09 4 state funds to renovate tw o former dormitories to offer substance abuse treatment behavior modification. The facilities will separately house 12 males and 12 females while offering counseling through the Louisiana State University (LSU) Health Sciences Center and education courses through local school systems. Construction is slated to begin in the coming weeks, though no official start date has been set ( News Star, 11/16 ). Massachusetts Patrick Administration Announces Medicaid Cuts, Mental Health Affected: On November 13, Governor Deval Patrick222s (D) Administration announced Medicaid cuts to begin eliminating the program222s $307 million shortfall. Among other changes, the Patrick Administration proposed requiring mental health patients to obtain prior approval for certain brand - name prescription drugs; cutting $15 million from dental benefits; raising copayments for specialists and some pharmaceuticals drugs; eliminating some in - home care service s; cutting nursing home pre - screening; and reducing payments to hospitals for patients who stay longer than 20 days. The cuts account for roughly one - third of the state222s $117 million share of the Medicaid shortfall and require approval by the Massachuset ts Legislature ( Boston Globe, 11/14 ). Baystate Medical Center to Transfer Substance Abuse Programs to Outside Provider : Citing a net loss on the center222s substance abuse services, Baystate Medical Center will transfer its substance abuse treatment responsibilities to Behavioral Health Network Inc. (BHNI) within four months. Fifty - eight Baystate employees will lose their j obs in the move; however, the company plans to assist former employees in securing positions with BHNI. The Massachusetts Department of Public Health will oversee the transition ( Mass Live, 11/17 ). Mississippi Governor Releases Budget, Includes Closure of Some Mental Health Facilities : On November 16, Governor Haley Barbour (R) released his $5.5 billion budget proposal for the state budget year beginning July 1, 2010. Governor Barbour222s proposal, which spends $715 million less than the current - year budget, includes significant modifications to the state222s school system as well as 12 percent cuts to most state agencies. In addition, the governor222s budget wou ld close several mental health facilities ( AP via Newsday, 11/16 ). Supreme Court Upholds Ruling , Finding State Agency Overstepped Authority in Medicaid Pharmacy Regulation : On November 12, the Mississippi Supreme Court upheld a chancery judge222s ruling that the Mississippi Division of Medicaid lacked the authority to implement new Medicaid pharmaceuti cal reimbursement plans without approval from the Mississippi Legislature . The final ruling comes after the chancery judge preliminarily blocked a $34 million pharmaceutical reimbursement reduction in 2008. The Supreme Court ruled that only the state leg islature has the authority to change Medicaid reimbursement plans in the absence of a federal mandate (AP via CBS, 11/12 ; Kaiser Health News. 11/13 ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition November 18, 2009 11/18/09 5 Missouri State Estimates Medicaid Costs under National Health Care Reform : The Missouri Department of Social Services estimates that, under the U.S. Senate Finance Committee222s health c are reform legislation ( SB 1796), Missouri222s share of Medicaid expenses would increase $91 million to expand the program222s eligibility cap from 20 percent of the federal poverty level (FPL) to 133 percent of the FPL. Under the Financing Committee222s bill, the federal government would pay 95 percent of the cost of the new enrollees during the transition phase. In Missouri, the Finance Committee222s plan would cost the federal government an estimated $1.7 billion, expanding the program to 225,000 new enrollees ( Missourian, 11/12 ). New Mexico Update: State Fines OptumHealth for Late Provider Reimbursements : In late October, the New Mex ico Behavioral Health Collaborative fined its management contractor, OptumHealth , $1.2 million for failing to pay behavioral health service provider reimbursements in a timely manner. At a meeting on November 10, the Collaborative fined OptumHealth again, imposing a $10,000 per - day sanction until the contractor catches up with its overdue claims, and establishing plans to hire a state monitor to oversee Optum222s performance. At the same meeting, Optum representatives highlighted that the company has already reduced the reimbursement backlog from 50,000 unprocessed claims to only 13,000. OptumHealth took over management of New Mexico222s behavioral health system in July under a four - year $1 billion contract, replacing ValueOptions New Mexico which was also criticized for poor performance ( New Mexico Independent, 11/11 ; New Mexico Independent, 10/30 ; Albuquerque Journal via Behavioral Health Central, 11/11 ). New York Update: State Submits Corrective Housing Plan for Mentally Ill in New York City : On November 7, Governor David Paters on (D) submitted a plan to rectify the housing situation for individuals with mental illness currently living in adult homes in New York City. The plan was part of a U.S. District Court case (Disability Advocates Inc. v. David A. Paterson et al.) in which advocates allege d 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. Disability Advocates Inc. contends that the governor222s corrective housing plan would not create enough beds to accommodate all of the residents that qualify for supported housing ( Legislative Gazett e, 11/16 ). Senators Introduce Bill Requiring Health Insurers to Obtain State Approval to Discontinue Coverage : New York Senators Eric Schneiderman (D) and Neil Breslin (D) introduced legislation in New York Senate to require health insurance companies to obtain state approval prior to cancelling a beneficiary222s line of coverage. The bill is known as 223Ian222s Law,224 named after a Florida- resident whose coverage was revoked by an insurer because of excessive cost. The insurer later reinstated Ian222s policy; ho wever, lawmakers continue to pursue the law ( Miami Herald, 11/9 ; Kaiser Health News, 11/11 ). Duches s County Departments of Health and Mental Hygiene Face Cuts : On November 16, Duchess County Executive William Steinhaus proposed a 2010 budget that would spend $1.9 million more than SAMHSA222s Weekly Financing News Pulse: State and Local Edition November 18, 2009 11/18/09 6 the county222s $397 million current - year budget. Despite the budget increase, Steinhaus222 budget includes a $400,000 reduction to the Department of Health222s (DOH) budget, reducing it from $9.7 million to $9.3 million, and a $1.58 million cut to the Department of Mental Hygiene222s (DMH) budget, taking it from $11.98 million to $10. 4 million. Among other changes, the DOH budget would eliminate the Long- Term Home Health Care Program while the DMH budget would transition the county - run day treatment centers to a non - profit agency ( Poughkeepsie Journal, 11/16 ). North Carolina CMS Grant Funds Expansion of High- Risk Insurance Pool : The North Carolina Health Insurance Risk Pool (NCHIRP) , also known as Health Assist, received $1.5 million through the Centers for Medicare & Medicaid Services 222 (CMS) High Risk Pool Operational Loss Grant Program to subsidize high - risk insurance offerings. NCHIRP offers subsidized insurance to state residents with pre - existing medical conditions earning up to 300 percent of the FPL. Program administrators estimate that the CMS grant will insure 500 new enrollees and report that the program used grant funding to begin expanded enrollment on November 10 ( Carolina News Wire, 11/10 ; Kaiser Health News, 11/11 ). Data Show State Employee Health Plan Expenses Up 4 Percent : Data receiv ed by the North Carolina Legislature November 12 show that medical claims for the state employee health plan are 4 percent higher than expected for the first three months of the fiscal year. State plan administrators speculate that the increased expenses represent increased utilization prior to a scheduled July 1 out - of - pocket payment increase and note that the plan is still on pace to have $130 million cash on hand next summer. This past spring, the North Carolina Legislature approved a $675 million bail out for the plan when it neared insolvency ( AP via CBS, 11/12 ; Kaiser Health News , 11/13 ). Mental Health Provider Exits Three Counties, Causes Transition Difficulties : On October 30, Alpha Omega Health withdrew from the mental health services market in Madison County after withdrawing from Mitchell and Yancey Counties earlier this year. RHA Health Services has accepted Alpha222s previous clients; however, Alpha did not provide RHA with a client list so an estimated 100 patients are currently without care. RHA222s services are slightly different from Alpha222s, offering less intensive mental health services but also providing some substance abuse treatment. A spokesperson from RHA said that the agency is referring individuals who need more substantial mental health care to providers capable of administering those services ( Ashville Citizen- Times, 11/16 ). Oklahoma State Behavioral Health Boards Cuts Slots and Funding for M/SU Services : The Oklahoma Board of Mental Health and Substance Abuse Services voted No vember 13 to cut $7.3 million from the state222s M/SU services, stemming from 5 percent departmental cuts previously ordered by state lawmakers. The board voted to merge two M/SU clinics in Norman to save $3.8 million, eliminating roughly 60 beds and furthe r reducing the number of slots dedicated to children222s mental health treatment. The board222s plan also reduces staff at Griffin Memorial Hospital in Norman and closes a 20 - bed substance abuse unit in Tahlequah while adding additional beds in other cities. Further cuts will reduce mental health provider contracts by $500,000, substance abuse provider contracts by $185,000, and education and outreach SAMHSA222s Weekly Financing News Pulse: State and Local Edition November 18, 2009 11/18/09 7 contracts by $450,000 in addition to laying off 100 state employees. Finally, there is some procedural contr oversy surrounding the cuts as the Oklahoma Public Employees Association contends that the mechanism by which the board approved the cuts violated the Oklahoma Open Meetings Act , thereby nullifying the board222s actions ( Tulsa World, 11/14 ; Oklahoman, 11/14 ). Oregon Rates Increase for Individual, Small Group Health Insurance Plans : According to data from the Oregon Insurance Division, average premium rates for individual plans will increase 22.8 percent under Health Net Plan of Oregon, 17.7 percent under ODS Health Plan, and 15.9 percent under Regence BlueCross BlueShield . In addition, small group employer - sponsored plans will see average premiums of 16 percent under Regence, 12.8 percent under Providence Health Plan, and 11.5 percent under PacificSource Health Plans ( Statesman Journal, 11/15 ). Pennsylvania Philadelphia Saves by Switching 223Managers224 Health Plan Offerings : On November 1 2, Philadelphia Managing Director Camille Barnett announced that the city will modify its 223managers224 health plan offerings to save $6 million. The plan applies to 6,900 city employees, including the city222s managers, non- unionized employees, and union members who opted out of union coverage. Beginning January 1, 2010, the new plans will include some increased copayments, higher out - of - pocket maximums, and increased hospitalization charges; however, Barnett says benefit reductions are insignificant ( Philadelphia Inquirer, 11/13 ; Kaiser Health News, 11/13 ). Tennessee State to Cap CoverTN Enrollment : Beginning January 1, 2010, Tennessee will cap enrollment for CoverTN, the state222s health insurance program for uninsured low - income residents who are ineligible for Medicaid. The move comes as program administrators struggle to stay within budget with 2,500 new enrollees. Under the program, the state pays one - third of enrollees222 health insurance premiums and employers have the option of paying an additional third while the enrollee pays the remainder. Premiums under Co verTN average $180 a month ( AP via WREG, 11/12 ). Washington Update: Despite Planned Increases in Out - of - Pocket Costs, Basic Health Remains in Demand: In June, Washington officials cut funding for the state222s Basic Health Program by 43 percent, electing to increase out - of - pocket costs to drive down enrollment rather than reducing program eligibility. Under the cuts, Basic Health will continue to provide health care for those earning up to 200 percent of the FPL but beginning January 1, 2010, monthly premiums will increase an average of $25 and the yearly deductible will rise from $150 to $250. However, state officials report that the wait list for the program is nearly equal to the program222s current enrollment 227 with 78,834 program beneficiaries and 78,419 residents on the waiting list. The large wait list is causing worries that the out - of - pocket costs will not be sufficient to drive program enrollment down to the state222s goal of 60,000 to 65,000 beneficiaries by early 2010 ( Seattle Post-Intelligencer, 11/16 ; Kaiser Health News, 11/17 ).
