Health Care Reform News Around the Nation for the Week of June 16

On Monday, state auditors said that Children's Health Plan Plus, Colorado's version of the State Children's Health Insurance Program, incorrectly classified 10% of beneficiaries, the Denver Rocky Mountain News reports. The misclassification means that beneficiaries in the program were either eligible and denied coverage or ineligible and received coverage.

The auditors did not estimate the total cost of the errors in the report, which was given to the Legislative Audit Committee. However, in a sampling of 203 patients in seven counties, errors cost about $48,300. There are more than 53,500 children covered by the program.

The report also found that the state Department of Health Care Policy and Financing, which runs the program, does not monitor counties as they determine eligibility for the program.

The department did not dispute the findings and said it is working on fixing the problems.

The audit committee told the department to report on its progress in resolving the problems by November (Morson, Denver Rocky Mountain News, 6/9).

On Wednesday, Florida Gov. Charlie Crist (R) signed into a law a "bare-bones" $66 billion state budget for fiscal year 2009 that includes funding cuts for state hospitals, nursing homes and other social programs, the South Florida Sun-Sentinel reports. The budget is $6 billion less than the current budget (Kennedy, South Florida Sun-Sentinel, 6/12).

Crist said the budget includes adequate funding to enroll 38,000 additional children into KidCare, the state's version of SCHIP (Cotterell, Tallahassee Democrat, 6/12).

Hawaii hospital officials and physicians are concerned that $18 million in Medicaid payments, including $10 million in federal matching funds, could be lost if Gov. Linda Lingle (R) does not authorize the release of $8 million for Medicaid physician payments by June 30, the Honolulu Advertiser reports.

The state Legislature in 2007 approved the money for physician services provided under the state's Medicaid and Quest programs, which provide health care for low-income and uninsured residents.

According to the Advertiser, physicians and hospitals in the state have said there is an increasing gap between the cost of providing care and the payments they receive from the state and federal government, leading to what some have called a health care crisis that has driven many physicians to leave the islands.

State Rep. Josh Green (D), a physician, said Lingle's delay in releasing the $8 million could increase the risk of losing the $10 million in federal matching funds. Green said the state Department of Human Services, which manages the Medicaid and QUEST program, has revised Medicaid reimbursement rates for physicians twice in the past 18 years.

Lillian Koller, director of the human services department, said Lingle has agreed to release the $8 million for the 2009 fiscal year, which begins on July 1. Koller said the $10 million in federal matching funds would not be in jeopardy because it is "the normal matching federal money that the federal government pays us in Medicaid every time we spend a dollar in state money" (Lum, Honolulu Advertiser, 6/9).

On Wednesday, the Louisiana House Health and Welfare Committee unanimously approved a bill that aims to shift some Medicaid "uncompensated care" money from New Orleans hospitals to other hospitals in the southern part of the state, the New Orleans Times-Picayune reports.

The committee rewrote the Senate measure (SB 402) by state Sen. Bill Cassidy (R), which faced opposition from New Orleans lawmakers, to ensure the funds would not be reallocated without approval by the Legislature. The measure would create a new formula for distributing the Medicaid funds among seven hospitals in the southern part of Louisiana.

According to Cassidy, the New Orleans region receives more than twice as much in Medicaid uncompensated care funds per resident than other regions in the southern part of the state.

Opponents of the measure said the New Orleans area receives more because it does more complex and expensive procedures than other hospitals in the south. In addition, they say the measure would take away critical funding from New Orleans as the city tries to rebuild its health care system after Hurricane Katrina (Moller, New Orleans Times-Picayune, 6/12).

Two of Massachusetts' largest health insurers are expanding or launching health plans that feature physician ranking systems despite opposition to those systems by the Massachusetts Medical Society, the Boston Globe reports.

Under such ranking systems, patients who seek care from a top-rated, or top-tiered, physician have lower copayments.

Officials from Tufts Health Plan, the third-largest insurer in the state, said that the company will expand its health plan and physician ranking system, called Navigator, to include additional medical specialties, such as cardiology, dermatology, neurology, ophthalmology and urology.

Harvard Pilgrim Health Care, the state's second-largest insurer, said that it will consider expanding its physician ranking systems, called Independence, to residents not covered through the state's Group Insurance Commission, which purchases health insurance for most state employees and retirees.

The medical society in May filed a lawsuit against the Group Insurance Commission alleging that the ranking system defames physicians who provide high-quality and cost-efficient care but receive lower ratings and that the tiered systems defraud patients who have to pay higher out-of-pocket costs. Tufts Health and GIC were among the companies named as defendants in the lawsuit (Krasner, Boston Globe, 6/10).

New York state Department of Health officials have announced the state Medicaid program in October will stop reimbursing hospitals for preventable errors, known as "never events," the AP/New York Daily News reports. According to the AP/Daily News, the state is mirroring CMS' actions for Medicare on never events (Bauman, AP/New York Daily News, 6/5).

According to the AP/Daily News, New York's Medicaid program will halt payments for preventable errors such as wrong-site surgery, wrong-patient treatments, disabilities associated with treatment, medication errors and other errors.

Health Department spokesperson Claudia Hutton said the state will not allow beneficiaries to be billed for care for which the state has denied payment (AP/New York Daily News, 6/5).

On Tuesday, Pennsylvania Senate Republicans unveiled a health care proposal that would enhance care provided at community health centers and create a high-risk pool for state residents who are unable to obtain health coverage elsewhere, the AP/Philadelphia Inquirer reports (Raffaele, AP/Philadelphia Inquirer, 6/10).

The proposal, called HealthNET PA, also would allow physicians to receive continuing education credits for volunteering to provide care to the uninsured, establish a loan forgiveness program to encourage physicians to practice in the state and create incentives to help low-income uninsured patients or their physician obtain no-cost prescription drugs (Fahy/Barnes, Pittsburgh Post-Gazette, 6/11).

Under the plan, people who are denied coverage because of pre-existing medical conditions could be insured through a high-risk pool, in which members would pay 66% of their premiums and the state would contribute the rest (AP/Philadelphia Inquirer, 6/10).

In addition, the Republicans' plan would create a program to allow former employees to continue to receive coverage through companies with fewer than 20 workers.

The plan also contains some elements of state Democrats' health care bill, such as provisions that would promote electronic health records, allow insurers to refuse payment for preventable medical errors that result in serious health problems and allow children to remain on their parents' medical coverage until age 30.

The Republicans' plan would cost about $100 million annually and would be funded with surpluses in a fund used to assist physicians in paying their medical malpractice insurance (Pittsburgh Post-Gazette, 6/11). Half of the money would fund tax credits for businesses that donate money for the expansion of community health clinics and $5 million would go toward tax credits for people who enroll in health savings accounts.

By comparison, the cost of the Democratic plan, called Pennsylvania Access to Basic Care, is expected to exceed $1 billion by fiscal year 2012-2013 (AP/Philadelphia Inquirer, 6/10).

The Bureau of Managed Health Care at the Utah Department of Health will launch a program geared toward state Medicaid beneficiaries that will "reroute patients to personal physicians who can provide better continual care at a lower cost," the Salt Lake Tribune reports.

According to the Tribune, the intent of the program is to reduce the number of emergency department visits by patients seeking nonemergency care.

Under the program, Medicaid patients will receive a phone call from one of two new, full-time state employees after their first visit to an ED for nonemergency treatment. The patient will be encouraged to seek care from a family practitioner or physician at community health centers.

Patients also will be informed of instances when it is appropriate to visit an ED.

Gail Rapp, director of the managed health care bureau, said the state will attempt to determine why patients decided to visit the ED for nonemergency care instead of their physician or community health center.

The program will be funded with a $503,000 federal grant. The funds are part of $50 million in grants allocated under the federal Deficit Reduction Act of 2005 to help Medicaid programs in 20 states with urban and rural programs assist residents with nonemergency needs (Rosetta, Salt Lake Tribune, 6/9).