SAMHSA222s Weekly Financing News Pulse: State and Local Edition November 24, 2010 11/24/2010 1 SAMHSA222s Weekly Financing News Pulse: State and Local Edition Alabama California Florida Idaho Kansas Kentucky M aine Massachusetts Mississippi Montana N evada New York O hio Pennsylvania Virginia To Subscribe to SAMHSA222s Weekly Financing News Pulse, please go to the following link and choose 223Health Care Financing224: https://service.govdelivery.com/se rvice/multi_subscribe.html?code=USSAMHSA&origin=http://www.samhsa.go v/enetwork/success.aspx For quest ions or comments, please contact Rasheda Parks ( Rasheda.Parks@samhsa.hhs.gov ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition November 24, 2010 11/24/2010 2 Around the States: State and Local Behavioral Health Financing New s Alabama CMS Reaches Deal with State Over Medicaid Overpayments: On November 17, Governor Bob Riley (R) announced that Alabama officials have reached an agreement with the U.S. Centers for Medicare & Medicaid Services (CMS) regarding alleged federal Medicaid overpayments . CMS originally asserted that Alabama 222s Medicaid calculations have yielded improperly high federal payments since the mid 1990222s . To recoup those payments, CMS threaten ed to withhold $500 million in current Medicaid funds . However, under the new agreement, CMS will release the $500 million and Alabama will use a new formula to determine the federal share of its Medicaid funding. The agreement will count new outpatient treatment categories as hospital costs to draw down additional federal funds ( AP via Canadian Business, 11/18 ). California MHSOAC Awards Del Norte County $415,800 in Proposition 63 Prevention and Early Intervention Funds : On November 18, the California Mental Health Services Oversight and Accountability Commission (MHSOAC) allocated Del Norte County $415,800 in Proposition 63 funds for prevention and early intervention (PEI) programming. MHSOAC oversees Proposition 63 funds , raised for county mental health programming through a state tax on residents earning over $1 million annually. The latest funding announcement brings current -year MHSOAC PEI funding to nearly $ 714 million ( The Pine Tree, 11/18 ). Fresno County Mental Health Advisory Board Recommends Contracting Mental Health Services at Psychiatric Facility : On November 17, the Fresno County Mental Health Advisory Board approved a measure recommending that the county contract with Crestwood Behavioral Health to run the county222s 16-bed psychiatric unit. County officials say the unit costs $3.2 million annually and note that the contract would save the county $1 million annually. The recommendation follows $9 million in county mental health services cuts in March, necessitated by lower-than - anticipated revenue. The Fresno County Board of Supervisors will consider the contract on December 14 . If the Supervisors approve the contract, Crestwood will take control of the unit on January 25 ( The Fresno Bee, 11/17 ). Florida SAMHSA Awards BayCare $200,000 for Veterans Behavioral Health Network : On November 17, the U.S. Substance Abuse and Mental Health Services Administration (SAMHSA) awarded $200,000 to BayCare Behavioral Health to develop the Veteran, Family, and Community Network (VFCN). The VFCN will offer behavioral health intervention and outreach services , counseling, and peer support to Pasco County veterans and their families ( BayCare via PR Newswire, 11/17 ). Legislature Passes Nonbinding Resolution Requesting Greater Leew ay for Medicaid Reform Pilot : On November 16, the Florida House and Senate approved a nonbinding resolution requesting greater flexibility to change the state222s Medicaid program and transition more beneficiaries into managed care. The Florida Agency for H ealth Care Administration (AHCA) requested a three - year extension of the SAMHSA222s Weekly Financing News Pulse: State and Local Edition November 24, 2010 11/24/2010 3 state222s Medicaid reform pilot program, which enrolls beneficiaries in private managed care plans rather than the state222s traditional fee-for-service (FFS) plan. The pilot currently o perates in Baker, Broward, Clay, Duval, and Nassau Counties; however, Florida222s program waiver expires July 1, 2011. Ra ther than approve the extension, the Centers for Medicare & Medicaid Services (CMS) will review the program, likely making changes prior to approval ( Health News Florida, 11/17 ). Idaho DHW Director Says Department Faces $171 Million Deficit for FY2012: On November 16, Idaho Department of Health and Welfare (DHW) D irector Dick Armstrong testified before state legislators that the state222s Medicaid program faces a potential $171 million FY2012 deficit. Director Armstrong says the deficit is the result of decreased f ederal matching funds and lower -than- anticipated American Recovery and Reinvestment Act (ARRA) Federal Medical Assistance Percentage (FMAP) funding. DHW officials say that the Medicaid program may have to rely on more volunteer services in light of the deficit ( AP via KIVITV, 11/17 ). Kansas State Auditors Recommend Changes to Reduce State Prescription Drug Spending, Mental Health Affected : On November 18, state auditors presented the Kansas Legislative Post Audit Committee with an audit of Kansas222 FY2010 prescription drug spending. The audit determined that the state spent $243 million in FY2010 on prescription drugs, mostly through the Kansas Health Policy Authority (KHPA), which oversees the state222s Medicaid program , and the State Employees Health Benefit Plan. In addition, t he audit outlines five potential changes that could cut state prescription drug costs by up to $4.6 million. The auditors es timate that the state could save $2.2 million annually by negotiating better drug prices through a multi -state drug consortium. In addition, the audit suggests that the state could save $800,000 to $ 1.5 million annually by increasing mental health drug re gulation, and save up to $470,000 annually by r educing pharmacy compensation for Medicaid prescriptions . The audit also recommends allowing doctors to prescribe greater quantities of certain drugs per prescription and implementing 223step -therapy224 programs, saving a total of $ 280,000 to $6 00,000 annually. Changing the regulation of mental health drugs and implementing 223step -therapy224 wou ld require changing state law ; however, the c ommittee members did not propose the introduction of any legislation ( Kansas Health Institute, 11/18 ). Kentucky Insurance Commissioner Orders Individual Market Insurers to Offer Children Open Enrollment in January : On November 18, Kentucky Insurance Commissioner Sharon Clark mandated that all insurers offering individual health policies offer annual open enrollment in January for children under 19. With the open enrollment mandate in effect through 2013, t he move forces insurers to offer children-only health policies until 2014, when they can no longer deny coverage based on health status. The requirement is intended to protect the children-only health insurance market, which has suffered as insurers make moves to prevent intermittent coverage and limit costs . The order requires insurers to establish rules to discourage intermittent coverage, offer a means for individuals to obtain coverage outside open enrollment for qualifying events, and limit the number of chi ldren-only health policies offered ( The Lexington Herald -Leader, 11/19 ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition November 24, 2010 11/24/2010 4 Maine Augusta Community Mental Health Facility Ends Most Youth Care : Serenity Behavioral Health Systems222 Child and Adolescent Services program at the Augusta community mental health facility has ended services for most youth. Citing a lack of adequate funding, facility officials say they will only offer services for youth with severe mental i llnesses (SMI). Serenity Systems officials say that, under the change, they will treat approximately 85 percent fewer youth . The facility received state funding from the Maine Department of Behavioral Health and Developmental Disabilities (DBHDD) until 2008, but has continued funding children services without state assistance for the past two years. DBHDD provided the center with $1.2 million in 2006, and $569,000 in 2007 ( The Augusta Chronicle, 11/20 ). Massachusetts Update: Governor Projects State Can Fund Substance Abuse Treatment T hrough End of Fiscal Year: Citing higher - than -anticipated tax revenue, Governor Deval Patrick ( D) has announced that he intends to fund substance abuse treatment services through the end of the current fiscal year. The state222s alcohol tax previously provided $110 million annually for substance abuse treatment; however, Massachusetts voters exempted alcohol from the state222s sales tax on November 2 . With the tax change slated to take effect January 1, Governor Patrick has requested that his staff use surplus tax revenue to provide the $43 million required to fund substance abuse treatment services th rough the end of the fiscal year. State officials have made no announcement regarding long-term funding for substance abuse treatment ( The Boston Globe, 11/18 ). Cape Cod Healthcare Closing Outpatient Office in Falmouth: Citing declining utilization and referrals, Cape Cod Healthcare will close its Falmouth outpatient mental health office by January 1. Cape Cod officials say the facility currently serves 459 patients, down from over 1,200 five years ago. One quarter of affected patients will switch to other local mental health providers, 60 percent will see the same mental health provider at another Cape Cod Healthcare facility, and 15 percent will be referred to their primary care provider ( Cape Cod Times, 11/22 ). Report Finds Most Residents Insured , Access to Health Services Limited : On November 16, the Massachusetts Health Council released a report finding that 97 percent of state residents have health insurance, due in large part to the state222s 2006 health reform law. However, the report found that access to health services is limited, with only 44 percent of primary care physicians accepting new patients and an increasing number o f individuals seeking primary care services in hospital emergency rooms ( AP via Boston Herald, 11/16 ; Kaiser Health News, 11/17 ). Mississippi Governor Proposes $5.5 Billion Budget with Mental Health Funding Cuts : On November 15, Governor Haley Barbour (R) proposed a $5.5 billion FY2012 budget that would cut mental health funding but increase state Medicaid funding. Governor Barbour222s proposal would cut the Mississippi Department of Mental Health222s (DMH) funding by 7.2 perce nt but increase the Mississippi Division of Medicaid222s (DOM) budget by $115 million , or 18.6 percent, to account for reduced American Recovery and Reinvestment Act (ARRA) Federal Medical Assistance Percentage (FMAP) funding. DOM officials SAMHSA222s Weekly Financing News Pulse: State and Local Edition November 24, 2010 11/24/2010 5 requested a funding increase of nearly 40 percent to compensate for reduced federal funding. The Mississippi Joint Legislative Budget Committee will meet December 8 to adopt broad spending recommendations and a final budget vote will come by April ( The Clarion -Ledger, 11/16 ; Ballot News, 11/20 ; AP via Bloomberg, 11/17 ). Montana Update: Governor Requests CMS Waiver for State Residents to Obtain Cheaper Prescription Drugs T hrough Medicaid: On November 16, Governor Brian Schweitzer (D) requested a U.S. Centers for Medicare & Medicaid Services (CMS) waiver to allow all state residents to enroll in a new Medicaid prescription drug discount program. The plan would allow residents to purchase prescription drugs at Medicaid rates , which Governor Schweitzer projects would reduce residents 222 costs by approximately 50 percent . The federal government has rejected Governor Schweitzer222s previous plans to import Canadian drugs and purchase discounted drugs from the U.S. Department of Veterans Affairs (VA) ( The Washington Post, 11/16 ). DPHHS Officials to Seek Medicaid Managed Care Demonstration Project : On November 16, Montana Department of Public Health and Human Services (DPHHS) officials testified before the Montana Legislative Finance Committee that DPHHS plans to request contract proposals for a five -county Medicaid managed care demonstration project. State officials say the project would require plans to demonstrate 10 percent savings for the Medicaid program and provide coverage for all Medicaid services. The project would include Cascade, Judith Basin, Lewis and Clark, Pondera, and Teton counties ( Billings Gazette, 11/16 ; Kaiser Health News, 11/17 ). Nevada Step2 Breaks Ground on New Substance Abuse Treatment Facility for Women : On November 16, the Reno -based substance abuse treatment organization , Step2, broke ground on a $4 million family counseling center. Step2 offers substance abuse treatment to women and provides accommodations for their children as well. Step2 officials say the new facility will allow them to increase annual capacity from 170 to 300 women ( KOLO, 11/16 ). New York NYS HF Survey Finds Employer -Sponsored Coverage Less Prevalent in New York, More Costly : The New York State Health Foundation (NYSHF) released a survey , finding that 58 percent of state residents have health coverage through an employer -sponsored plan. D own from 69 percent in 2001, employer- sponsored coverage in New York is no w below the n ational average of 65 percent. Despite lower enrollment, t he sur vey found that 70 percent of New York employers offer health coverage, exceeding the national average. In addition, the survey found that premiums for New York222s employer - sponsored plans are approximately 10 percent higher than the national average of $1, 115 monthly. Finally, according to the survey, t he majority of employers reported that they plan to increase employee cost sharing and 66 percent reported that they are 223struggling224 to pay for their employees222 health care. ( The Journal News, 11/20 ). SAMHSA222s Weekly Financing News Pulse: State and Local Edition November 24, 2010 11/24/2010 6 Monroe County Recovers $515,000 in Wasteful Medicaid Spending : On November 18, Monroe County officials acc epted $515,000 in recovered Medicaid spending that the county recouped through a fraud audit. As part of a state program allowing counties to access Medicaid data to target fraud and abuse, c ounty officials identified a total of $10 million in overpayment s from FY2010. The funds would go to the county222s share of Medicaid spending; however, since 2007, Monroe County has opted to allow the state to intercept 40.25 percent of its share of sales tax revenue rather than pay for its portion of the program dire ctly . Instead, the county will use the recovered funds to pay for social services. ( Democrat and Chronicle, 11/19 ). Ohio Update : Richland County Voters Narrowly Approve Mental Health Levy, Recount to Occur : On November 16, Richland County Board of Elections (BOE) officials announced that voters narrowly voted to replace the current mental levy , financing the Richland County Mental Health Board through 2017. Because t he levy was approved by only four votes, BOE officials will begin a recount on November 29. Though the current levy does not expire until 2012 , t he replacement levy would increase the rate , raising an additional $700,000 to compensate for state and federal funding cuts. If the recount determines that voters did not approve the replacement, the Mental Health Board may place the measure up for two additional votes, the last of which would come in November 2011 ( WKYC, 11/17 ). Pennsylvania Franklin County Commissioners Approve Budget with $150,000 for Substance Abuse Programming : On November 18, the Franklin County Board of Commissioners approved a tentative budget for the next fiscal year , including $150,000 for substance abuse programming. Of those funds, $ 100,000 would cover state funding reductions for the county222s Drug and Alcohol Probation Partnership (DAPP ), which o ffers substance abuse treatment to convicted individuals . County officials say the DAPP has saved $162,500 since it began in February , largely by reducing incarceration costs . State officials reduced DAPP funding several times during FY2010 and have already cu t current -year funding from $220,442 to $213,490. Franklin is one of 37 Pennsylvania counties using the DAPP program ( Chambersburg Public Opinion, 11/18 ; Chambersburg Public Opinion, 11/19 ). Virginia State Officials Submit Budget Cut Plans, DBHDD Proposes Closing Two State Mental Health Hospitals : To comply with Governor Bob McDonnell222s (R) request that all state agenc ies submit proposals cutting their budgets for the coming fiscal year, Virginia Department of Behavioral Health and Developmental Disabilities (DBHDD) officials recommended closing two state men tal health hospitals. DBHDD officials suggested closing the Southern Virginia Mental Health Institute in Danville and the North Virginia Mental Health Institute in Falls Church to save a combined $32 million. The governor222s office is review ing agencies222 proposals and will present a proposed budget to the Virginia Legislature in mid - December ( Danville News, 11/19 ; AP via WRIC, 11/19 ) .