Health Reform Around the Nation: January 22, 2008

Three Broward County, Fla., residents filed a class-action lawsuit in federal court against the Florida Agency for Health Care Administration alleging that a Medicaid pilot program improperly keeps beneficiaries in unsuitable health coverage, the AP/St. Petersburg Times reports (AP/St. Petersburg Times, 1/13).

Former Gov. Jeb Bush (R) in December 2005 created a pilot program to shift some of the state's Medicaid beneficiaries to managed care plans and cap spending growth on the program at 8% for the next five years. Under the new system, the state pays HMOs higher rates for treating sicker beneficiaries than for treating healthy beneficiaries.

The plan began on July 1, 2007, in Duval and Broward counties (California Healthline, 1/31/06). About 200,000 beneficiaries in Broward County are enrolled in the HMO-style plans.

According to the lawsuit, federal law allows beneficiaries to change plans if they have "good cause," but promotional information sent to beneficiaries in the pilot program did not fully explain the right. In addition, counselors hired by the state provided inaccurate information to potential beneficiaries, who were told that they had to remain under their plan for a year, the lawsuit said (AP/St. Petersburg Times, 1/13).

PeachCare, Georgia's version of the State Children's Health Insurance Program, will receive enough federal funding in fiscal year 2008 to address a shortfall and to enroll an additional 40,000 children in the program, according to Department of Community Health Commissioner Rhonda Medows, the Atlanta Journal-Constitution reports.

In FY 2007, Georgia received $167 million in federal funding for PeachCare and had to freeze enrollment from March to July. For FY 2008, PeachCare will receive $325 million, according to a report released on Thursday by the Congressional Research Service.

Georgia is one of 19 states that received a funding adjustment to relieve shortfalls. The funding will allow PeachCare to enroll up to 295,000 children. State officials on Monday said they plan to resume promotion of the program (Schneider, Atlanta Journal-Constitution, 1/15).

Maine physicians, hospitals and public health officials on Wednesday unveiled a statewide electronic health records system, called HealthInfoNet, as part of an effort to improve health care quality, reduce medical errors and slow the growth of health care costs in the state, AP/Foster's Daily Democrat reports.

Advocates estimate that the system will save $50 million annually by eliminating duplicate and unnecessary tests, procedures, prescriptions and hospital admissions.

Construction on the non-for-profit HealthInfoNet network is scheduled to begin later this year, and supporters have raised $4 million for the project. A two-year pilot program will begin this winter and will involve more than 2,000 health care providers in the state, including 15 hospitals and one-third of the state's physicians (AP/Foster's Daily Democrat, 1/16).

Maryland Gov. Martin O'Malley (D) on Wednesday announced a $15.2 billion FY 2009 budget proposal, which includes nearly $125 million to implement legislation to expand subsidized health coverage, the Washington Post reports (Wagner, Washington Post, 1/17).

According to the Baltimore Sun, the state faces a projected $1.7 billion structural budget deficit for FY 2009. O'Malley on Wednesday said funding for a Medicaid expansion and other programs would not be available if voters in November do not approve a slot machine referendum.

O'Malley's budget also includes $3.5 million to establish a new program for behavioral health services for veterans in rural areas and to provide money for public safety initiatives, including $3 million to expand HIV screening and treatment of prison inmates (Smitherman, Baltimore Sun, 1/17). In addition, the governor has proposed $8.8 million to expand graduate nursing programs in the state (Washington Post, 1/17). He also included funding for programs that improve children's access to dentists.

The budget proposal includes $68 million in cuts to Medicaid, which is possible because of lower-than-expected enrollment in the program, according to state Department of Health and Mental Hygiene Secretary John Colmers (Washington Post, 1/17). O'Malley also proposed reducing retiree health care expenses (Baltimore Sun, 1/17).

On Thursday, the newly formed Massachusetts Prescription Reform Coalition announced an effort to curb pharmaceutical industry marketing in an attempt to bring down drug costs and health spending, the Boston Globe reports.

The group contends that rapid drug spending growth is putting Massachusetts' health care law in jeopardy and hindering other initiatives to expand health insurance in the state.

The coalition has three objectives:

• Prohibit gifts from drug makers to health care professionals who prescribe drugs;
• Ban data-mining; and
• Create a drug education program to provide unbiased information to physicians.

• AARP;
• The Massachusetts Public Interest Research Group;
• The American Heart Association;
• The American Stroke Association;
• Blue Cross and Blue Shield of Massachusetts; and;
• Neighborhood Health Plan (Krasner, Boston Globe, 1/17).

The Nevada State Medical Association has released recommendations to overhaul the J-1 visa waiver program, which allows foreign physicians to practice in the state in medically underserved communities, after a Las Vegas Sun investigation found the program "in some cases has been abused by employers," the Las Vegas Sun reports.

The Sun investigation found that some foreign physicians were forced by their sponsors to work up to 100 hours per week, were being "cheated out of their salaries" and were "diverted from the patients" in underserved areas that they were supposed to help.

Larry Matheis, executive director of the medical association, in a letter to the Nevada State Health Division recommended that guidelines governing the J-1 visa program be adopted as regulations, which would make them similar to state laws. Matheis wrote that an existing advisory group that makes recommendations about the program should be expanded to include anyone who is interested and that its meetings should be made public.

Matheis also recommended eliminating noncompete clauses that restrict where J-1 doctors can work after leaving their employer's practice and bringing the contracts more in line with federal guidelines. In addition, he recommended that the state expand its current whistleblower protection laws to physicians, their families and others who might report program violations (Allen, Las Vegas Sun, 1/16).

Pennsylvania Gov. Ed Rendell (D) has said he will not approve medical malpractice subsidies for physicians until state lawmakers agree to fund his Cover All Pennsylvanians program, the Pittsburgh Post-Gazette reports (Fahy/Barnes, Pittsburgh Post-Gazette, 1/13).

Rendell's new funding plan would use half of the revenue from the state's Health Care Provider Retention Account, which is projected to reach $414 million by Dec. 31. The account, funded by the state's cigarette tax, was created to offset medical malpractice costs in an effort to keep doctors and specialists in the state.

According to Rendell, fewer malpractice lawsuits and lower malpractice insurance premiums have led to a surplus in the account that the state can afford to use. Rendell also would pay for the coverage expansion through:

• A 10-cents-per-pack increase in the state cigarette tax, which would generate an estimated $65 million annually;
• A first-time tax on the sale of cigars and smokeless tobacco, which could generate $50 million annually; and
• $40 million from a fund that pays for the care of people involved in catastrophic automobile accidents (California Healthline, 12/11/07).