WeeklyFinancingNewsPulseStateandLocalEditionfinal20091006.pdf (PDF | 236.50 kb)
SAMHSA222s Weekly Financing News Pulse : State and Local Edition October 6 , 2009 10/6/09 1 SAMHSA222s Weekly Financing News Pulse: State and Local Edition Alabama Arizona Connecticut Georgia Idaho Illinois Kentucky Maryland Massachusetts Michigan Minnesota Mississippi Nebraska New Hampshire N ew Mexico New York North Carolina Washington West Virginia Wisconsin Wyoming For quest ions or comments, please contact Kevin Hennessey ( kevin.hennessy@samhsa.hhs.gov ). SAMHSA222s Weekly Financing News Pulse : State and Local Edition October 6 , 2009 10/6/09 2 Around the States: State and Local Behavioral Health Financing News Alabama Hospital Settles Medicare Fraud Allegations : The U. S. Department of Justice (DOJ) announced that St. Vincent222s Health System has agreed to pay nearly $2 million to settle allegations that its hospitals filed false Medicare claims between 2002 and 2008. The hospitals allegedly performed kyphoplasty as an i npatient procedure rather than an outpatient procedure , artificially inflating Medicare reimbursements. Under the terms of the deal, St. Vincent222s admits no wrongdoing. Three Indiana hospitals have also agreed to pay $6 million to settle similar allegations ( Birmingham Business Journal, 9/29 ). Arizona Poll Finds Opposition to Obama222s Health Plan: A September 27 Rasmussen poll found that 57 percent of likely vo ters in Arizona oppose President Obama222s health care plan while 41 percent support it. In the same poll, 77 percent of respondents believe that the president222s plan will raise taxes on middleclass Americans, 55 percent believe the plan will reduce the qua lity of care, and 56 percent think that the plan will raise health insurance costs ( Phoenix Business Journal, 9/29 ). Connecticut Connecticut AG Seeks Information Reg arding Insurer222s Communications About Health Reform and Medicare: Following a Centers for Medicare & Medicaid Services (CMS) investigation into communications between Humana Inc. and its beneficiaries regarding the effects o f health care reform on Medicare Advantage (MA) plans (Financing News Pulse 9/25 edition), Connecticut Attorney General Richard Blumenthal has requested information regarding similar practices from the five major Connecticut insurers 226 Aetna Inc., UnitedHealth Group Inc. , Health Net , Wel lPoint Inc.222s Anthem Health Plans , and ConnectiCare Inc. Representatives from WellPoint222s Anthem Health Plans said that they had 223yet to indentify such information224 and the other four insurers reported that they had not sent any such letters to their bene ficiaries ( Reuters, 10/2 ; AP, 10/3 ). Georgia Federal Judge Rejects State222 s Mental Hospital Plan: On September 30, U.S. District Court Judge Charles A. Pannell rejected the state222s January agreement with the DOJ to improve conditions at its psychiatric hospitals over five years (Financing News Pulse 4/31, 1/23 editions). The ju dge said that he could not approve the agreement because DOJ officials no longer support the motion after finding that 223harmful and unsafe224 conditions continue at the state222s hospitals and concluding that there has been 223little substantive, sustained impro vement224 over the past nine months. The judge is likely to conduct a hearing to facilitate a new agreement; however, he is also entitled to order significant changes, including stripping the state of the authority to control its psychiatric hospitals ( Atlanta Journal Constitution, 9/30 ). Community Services Board of Middle Georgia Closing Three Facilities : The Community Services Board of Middle Georgia announced that it will close three facilities that provide services for the developmentally disabled in Johnson, Pulaski, and Wilcox Counties by the end of October. The board222s SAMHSA222s Weekly Financing News Pulse : State and Local Edition October 6 , 2009 10/6/09 3 D irector of D evelopmental D isabilities said the agency faces a $1 million budget deficit, largely due t o state cuts in Medicaid, and that eliminating the three centers will save the board $100,000 annually ( WMAZ, 10/1 ). Idaho Twin Falls County Commissioners Approve New S ubstance Abuse Facility : The Twin Falls County Commissioners have approved a substance abuse treatment center for youth aged 12 to 17. Prior to opening, the facility must obtain licenses from the Idaho Department of Health and Welfare for childcare and su bstance abuse treatment ( Times - News, 10/3 ). Illinois Governor Establishes Nursing Home Safety Taskforce : After a series of Chicago Tribune stories that hi ghlighted the conditions in Illinois nursing homes and noted that individuals with a primary mental health diagnosis now make up 15 percent of the state222s nursing home patients, Governor Pat Quinn (D) announced the creation of a nursing home safety taskfor ce. The group will include officials from the six state agencies responsible for nursing home safety, the Departments of Public Health, H ealthc are and Family Services, Aging, Corrections, Human Services , and the state police ( Chicago Tribune, 10/2 ). DHFS Finds Medicaid Physicians Delivering Quality Care : The Illinois Department of Healthcare and Family Services (DHFS) reports that 90 percent of doctors in the state222s Health Connect program for Medicaid enrollees have earned bonuses for quality care. After implementing a $25 per- patient bonus for meeting national benchmarks in the prevention and management of asthma, diabetes, breast cancer and other chronic conditions in 2008, DHFS has paid doctors $2.9 million in bonuses. To earn the bonuses doctors must outperform 50 percent of Medicaid doctors nationally ( Chicago Sun - Times, 10/1 ; Kaiser Health News, 10/1 ). Kentucky Report Finds Prescription Drug Use Rising : A report by the Kentucky Justice and Policy Safety Cabinet found that both legal and illegal prescription drug activity increased between 2005 and 2007. Between 2005 and 2007, t he rate of prescriptions for controlled substances increased in 118 of the state222s 120 counties while, between 2006 an d 2007, prescription drug related offenses and arrests rose 23.6% and 6.3% respectively ( Tri- State, 10/1 ; KY Justice and Policy Safety Cabinet, 9/30 ). Maryland Prince George222s County Issues Layoffs, Health Department Affected: On October 2, the Prince George222s County Department of Health (DOH) laid off six employees as part of an effort to close the county222s $22.7 million budget deficit. The layoffs, which take effect November 1 and are part of broader county layoffs , are expected to be the first of several rounds affecting DOH ( Washington Post 10/2 ). Massachusetts Public Hearings Scheduled for 223Global Payment224 Phase of Health Reform, Hospital Executives Protest Change: Public hearings began the week of October 5 to discuss a state commission222s recommendation that the state move from a fee - for- service (FFS) model to a 223global payment224 model for health care SAMHSA222s Weekly Financing News Pulse : State and Local Edition October 6 , 2009 10/6/09 4 payments (Financing News Pulse 7/20 edition). Under the new system, slated to begin within five years, health care providers would receive flat monthly fees for each client rather than payments for individual services rendered . Among other hospital executives criticizing the change, Ellen Zane , CEO of Tufts Medical Center and C hairwoman of the Board of the Massachusetts Hospital Association said that the state does not understand the ramifications of such a sudden and significant shift ( Boston Globe, 10/4 ; Kaiser Health News, 10/5 ). Audit Finds Businesses Not Complying with Health Reform Law : An ongoing audit of employers who provided incomplete or incorrect information to the state regarding their empl oyer - sponsored health insurance found that, so far, 40 percent of those businesses had violated the state222s law mandating certain levels of employer participation and as a result, owe a total of $5 million in penalties. The audit, conducted by the Division of Unemployment Assistance , is not a representative sample of the state222s businesses ; division representatives estimate that 97 percent of state busines ses comply with the law. In addition, state officials emphasized the complexity of the law and noted that many noncompliant businesses have not intentionally violated the law ( Boston Globe, 10/1 ; Kaiser Health News, 10/1 ). Michigan After Temporary Shut Down Legislature Passes Partial Budget, Medicaid and Mental Health Affected: After budget delays shut down the government for several hours, the Michigan Legislature passed a one - month temporary budget to restore state funding , a s well as much of the state222s final budget, which aims to address a $2.8 billion deficit. Governor Jennifer Granholm (D ) signed the temporary budget to keep th e state running but did not act on the final budget bills. T he final budget bills reduce Medicaid reimbursements to doctors by 8 percent and cut non- Medicaid funding for mental health care by $40 million, including funding for prescription drugs. Eight of the 15 bills to enact a state budget have been sent to Governor Granholm while several others have passed the Legislature but have not been sent to the governor to prevent a possible veto ( WLNS, 10/2 ; Detroit F ree Press, 10/1 ; New York Times, 10/6 ). Minnesota State AG Sues Out - of - State Insurers: On September 30, Minnesota Attorney General Lori Swanson filed suit against Missouri- based Consumer Health Benefits Association (CHBA) and Nevada - based Home Health America alleging that they marketed and sold non- insurance products as health insurance in Minnesota. Swanson alleges that CHBA charged a $129.99 enrollment fee and monthly fees up to $149.95 for a health discount plan at certain doctors 222 offices and clinics that the company advertized as a functional equivalent to health insurance. In addition, Swanson alleges that Home Health sold long- term and home c are coverage policies to elderly Minnesotans; however, the company is not a licensed insurer in the state and the AG222s office is not aware of any instances in which Home Health paid any claims ( Minneapolis/ St. Paul Business Journal, 9/30 ). Mississippi Supreme Court Hears Arguments Over Medicaid Drug Prices : On September 29, the Mississippi Supreme Court heard arguments over a 2008 case in which a chancery judge ruled that Medicaid could SAMHSA222s Weekly Financing News Pulse : State and Local Edition October 6 , 2009 10/6/09 5 not implement a new pharmaceutical reimbursement plan without approval from the Mississippi Legislatur e and blocked the change from taking effect. Medicaid contends that it was acting within its authority when it sought to reduc e pharmacist payments by $34 million; however, the pharmacies contend that the state law gives the legislature sole authority to change reimbursement plans in the absence of a federal mandate ( AP via CNBC, 9/ 29 ; AP via WREG, 9/29 ). Nebraska University of Nebraska Doctor Outlines Health Care Practitioner Shortage : At a public hearing with Nebraska lawmakers on October 1, As sociate Professor Dr. Keith Mueller at the University of Nebraska Medical Center and Director of the University Center for Rural Health Research presented data showing that Nebraska has a shortage of health care workers. Mueller presented a study conducte d by the University that found that Nebraska222s ratio of health practitioners to residents is below the national average and 15 of its counties have almost no health care providers. In addition, the study found that 31 counties have one or no child behavio ral health practitioners. At the hearing, Dr. Mueller recommended expanding programs designed to increase the number of medical professionals practicing in the state, including expanding educational debt relief programs ( AP via New York Times, 10/2 ). New Hampshire HHS Commissioner Tells Legislature of Rising Medicaid Costs, Suggests Cuts: At a Legislative Fiscal Committee hearing on Septemb er 29, New Hampshire Department of Health and Human Services (HHS) Commissioner Nick Toumpas said that state Medicaid and welfare spending are rising at an unsustainable rate. Toumpas noted that a recent report estimated that the state Medicaid program wi ll be $7.6 million over budget this year unless adjustments are made ( AP via WCAX, 9/30 ). Medicaid Cuts Affect Mental Health Treatment : Beginning October 15, New Hampshire will reduce Medic aid funding for 10 community mental health centers to avert a $3 million deficit. Last year, the centers received $93 million in Medicaid funding, this year they will receive $91 million. The non - profit groups affected by the cuts say they will reduce their budgets by about 8 percent ( WMUR, 9/29 ; Nashua Telegraph, 9/30 ; Kaiser Health News, 9/30 ). Among other changes, the cuts will decrease reimbursements for functional services 227services provided in the community 227 from $106 an hour to $9 8 an hour and reduce the reimbursement s for case management from $404 a month to $381 a month ( Concord Monitor, 10/5 ). New Mexico Stat e Institutes Waiting List for Health Insurance Program : The New Mexico Department of Human Services (DHS) will institute a waiting list for the State Coverage Insurance Program (SCI) beginning November 2. SCI currently insures about 45,000 New Mexicans an d offers health insurance to residents earning up to 200 perce nt of the federal poverty level (FPL) for roughly $105 a month. The waiting list will only apply to individuals seeking to enroll in the program and not to those who enroll through employer gro ups. In addition, t he waitlist comes as the DHS222 Medical Assistance Division faces a $40 to $55 million shortfall for the current fiscal year ( New Mexico Business Weekly, 10/1 ). SAMHSA222s Weekly Financing News Pulse : State and Local Edition October 6 , 2009 10/6/09 6 New York State Faces Increasing Medicaid Costs as ARRA Funding Ends and Potential Medicaid Expansion Looms : New York222s deficit for the fiscal year beginning next April is estimated at $7 billion and is projected to reach $13 billion th e following year, owing largely to $5 billion in American Recovery and Reinvestment Act (ARRA) Medicaid funding which expires at the end of 2010. T he remaining $1 billion of the projected deficit comes from the predicted effects of national health care re form. Current legislative proposals w ould increase the state222s Medicaid burden by $900 million annually because the state222s benefits have remained generous throughout the recession. New York is one of a few states that maintained nearly all of its option al Medicaid benefits, choosing to continue expanding care; however, pending national health care reform legislation only offers to assume the costs of Medicaid expansions in states that do not already cover the care227 leaving New York to pay the full cost of the expansion ( Buffalo News, 10/1 ; Kaiser Health News, 10/1 ). State Mandates H1N1 Vacc ine for All Health Care Workers, Some Protest : New York is requiring all health care workers to get both the seasonal and the H1N1 (swine flu) vaccine or face possible termination . New York State Commissioner of Health Richard Daines notes that the state wants to ensure vaccination and that, in previous years when vaccination was voluntary, only 40 percent of health care workers received vaccinations. In addition to the New York State, the Hospital Corporation of America , Emory hospital in Atlanta, t he Un iversity of Pennsylvania hospital, t he University of Maryland hospital, and the Loyola University health system in Chicago are mandating vaccinations ( CBS, 10/4 ; Kaiser Health News, 10/5 ). North Carolina Reduced Medicaid Rates Take Effect : Beginning October 1, Medicaid will reduce the reimbursement rates for more than 20 services as part of a budget cut approved by the North Carolina General Assembly August 5. The move is expected to save the state $200 million over the two - year budget ( Ashville Citizen- Time, 9/29 ). Washington Panel Suggests Spending Allocations for Whatcom County Mental Health Tax: On September 29, the Whatcom County Council heard committee recommendations for the allocation of the county222s mental health tax re venue. The panel recommended allocating 20 percent for M/SU services in the county jail and juvenile detention center, 15 percent for pre- booking diversion, crisis stabilization and detox, and 15 percent for behavioral health support in county schools . T he .1 percent sales tax is expected to generate $2.5 million annually ( KGMI, 9/30 ; News Tribune, 9/29 ). West Virginia Se nator Announces ARC Substance Abuse Grants: U.S. Senator Robert Byrd (D - WV) announced that the Appalachian Regional Commission (ARC) has approved two grants totaling $54,723 to address West Virginia222s substance abuse problem. The WALS Foundation will receive a $24,723 grant to create a mock trial program to educate youth on substance abuse issues and the Partnership of African American SAMHSA222s Weekly Financing News Pulse : State and Local Edition October 6 , 2009 10/6/09 7 Churches will receive $30,000 for a community - based initiative to combat substance abuse among African Americans ( Huntington News Network, 10/1 ). Wisconsin State Creates Waiting List for Low - Income Insurance Program, Will Offer Lower - Tier Coverage to Waitlisted Residents : Governor Jim Doyle (D) announced October 5 that the state will create a wait list for the BadgerCare Plus Core Program, a program introduced July 15 to expan d to the state222s Medicaid program insuring childless adults earning up to 200 percent of the FPL (Financing News Pulse 6/22, 5/8 editions). For a $60 enrollment fee and small copayments, the program provides basic health services, including generic prescription drugs for eligible residents ; however, the Wisconsin Legislature only approved funding for 54,000 adults. As of October 5, roughly 60,000 residents had applied for the program but Governor Doyle says that anyone applying by October 9 will be enrolled. After the October 9 cutoff, applicants will be waitlisted for the program but receive limited coverage for $50 to $100 monthly. The supplemental waitlist program will require approval from the l egislature and will not utilize federal funds ( AP via Chicago Tribune, 10 /5 ; Business Journal of Milwaukee, 10/5 ). Court Orders Pharmacia to Pay $4.5 Million in Medicaid Fraud Case : On September 29, the Dane County Circuit Court ordere d Pharmacia Inc. , a subsidiary of Pfizer Inc., to pay $4.5 million for violating the state222s fraud law by misrepresenting pharmaceutical prices to the state222s Medicaid program. The ruling rejects the state222s request for $212 million, finding that the jury in the initial case grossly overestimated the number of violations. The jury previously determined that that the company had violated the law 1.44 million times; however, the circuit court ruled that Pharmacia violated the law 4,578 times and assessed a $1,000 forfeiture per violation ( AP, 10/1 ). State Extends COBRA Coverage : On October 1, the Wisconsin Office of the Commissioner of Insurance issued an emergency rule requiring insurers to continue group health insurance for laid- off employees even after their former employers go out of business or discontinue group coverage. Under the previous state and federal laws, laid off employees were only eligible for COBRA if their employers continued coverage. Under the new law, which is retroactive to June 30, Wisconsin residents remain eligible for COBRA regardless of their previous employer222s insurance status and remain eligible for the 65 percent COBRA subsidy from the ARRA ( Business Journal of Milwaukee, 10/2 ). State Sends Layoff Notices to Psychiatric Hospital Employees : The Wisconsin Department of Health Servi ces sent layoff notices to 85 employees at the Winnebago County Mental Health Institute for layoffs effective December 1 . Officials expect the facility to have significantly fewer clients because the state shifted responsibility for funding mental health treatment to the counties. Winnebago County will likely utilize more outpatient and community - based treatment and send fewer patients to t he state psychiatric hospital ( AP via Chicago Tribune, 10/3 ; Oshkosh Northwestern, 10/2 ). Green Bay Health Care Costs Increase, Remain Under National Average : According to a Milliman Inc. report, health care costs in the Green Bay area have increased from an average of $7,665 in 2002 to $12,035 in 2007. However, the same report found that Green Bay222s health care costs are still 17 percent SAMHSA222s Weekly Financing News Pulse : State and Local Edition October 6 , 2009 10/6/09 8 below the national average and 12 percent below the state average. The report found that, while Green Bay residents222 hospital and clinic utilization are below average , Green Bay area pharmaceutical, radiological, and physician visit costs are above average ( Green Bay Press Gazette, 9/28 ; Kaiser Health News, 9/29 ). Wyoming AGs Office Reports State Collected $7 Million in Medicaid Fraud Since 1993 : The Medicaid Fraud Control Unit in Wyoming222s Office of the Attorney General reports that Wyoming222s share of Medicaid fraud settlements totals $7 million since Congress required states to create Medicaid fraud units in 1993 ( Billings Gazette, 10/3 ).
