Clip file / Local news from the states

Each month, this column features selected short items about state health care policy digested from publications from around the country.

North Dakota, Nebraska get approvals for launching and expanding CHIP programs

WASHINGTON, D.C.—North Dakota in early October became the 42nd state to receive Health Care Financing Administration approval for its Children’s Health Insurance Program. The state plans to use up to $5 million in federal funds to expand Medicaid to 18-year-olds in families with incomes up to 100% of poverty.

Nebraska received approval to expand its CHIP, dubbed "Kids Connection," to cover an additional 16,000 children by October 2000.

North Dakota’s Medicaid program currently covers children age seven through 17 in families with incomes up to 100% of poverty and children through age six in families with incomes up to 133% of the poverty level. The federal poverty level is $16,450 for a family of four.

Benefits will be those available under the existing Medicaid program. A second phase of the CHIP implementation is under development.

The second phase of Nebraska’s Kids Connection will expand Medicaid eligibility for children under age 19 in families with incomes up to 185% of the federal poverty level. The benefit package will be the same as for others enrolled in the Medicaid program.

There will be no cost to families. The amendment builds on Nebraska’s original plan to expand Medicaid eligibility for children age 15 through 18 in families with incomes up to 100% of poverty. Prior to the CHIP program, children in that age group could only be covered if their family income was between 33% and 58% of poverty. The first phase alone was expected to cover nearly 1,000 children by July 1, 1999.

—Health Care Financing Administration releases, Oct. 9, Oct. 13

Iowa providers seek decentralization of state-sponsored indigent care

DES MOINES, IOWA—Improvements in telemedicine and advances at community hospitals make obsolete Iowa’s strategy of centralizing indigent care at the University of Iowa Hospitals and Clinics in Iowa City, a coalition of the state’s hospitals and physicians has told a legislative committee.

"Lead us in finding a way to provide all Iowans with the superior care they deserve, but without the hardship and indignities of long-distance travel, isolation, and separation," Iowa Health System Vice President for Public Affairs James Zahnd told a six-member legislative study panel in early October. Iowa Health System affiliates include St. Luke’s Hospital in Cedar Rapids, Finley Hospital in Dubuque, and Allen Memorial Hospital in Waterloo.

Zahnd praised a 1987 measure that allowed pregnant women receiving state-sponsored indigent care not to be required to travel to Iowa City for care and supported keeping the administration of the program with University Hospitals.

The panel agreed to refer the question to the full legislature for further consideration, but not before skeptics defended the current funding and delivery.

"It’s an integrated plan," said panel member Sen. Robert Dvorsky, D-Coralville. "You pull out one part, the rest of the system is going to collapse."

Critics said a change could jeopardize federal matching funds that leverage about $20 million on top of the state’s $10 million appropriation, as well as $40 million in unreimbursed services provided through the university system.

Cedar Rapids Gazette, Oct. 6

Federal individual-level data on employment, insurance available on the Web

WASHINGTON, D.C.—Individual-level 1996 data on demographics, employment, health status, health insurance, and health care utilization is available for downloading from a recently updated Agency for Health Care Policy and Research (AHCPR) Web site:

The Medical Expenditure Panel Survey Web site also provides documents on nursing homes and children’s health.

—AHCPR release, Oct. 1

Court rulings expand HMO consumer protections, latitude to sue in Pennsylvania, Texas

DALLAS—Court rulings in Pennsylvania and Texas have boosted consumers’ latitude to sue their health plans over complaints of inadequate care. The rulings signal the expansion of the role of health plans from insurance providers to entities with significant decision-making latitude in the provision of health care.

A Pennsylvania Superior Court ruled Oct. 5 that health maintenance organizations can be held liable for medical malpractice in the instance of vicarious negligence (mistakes on the part of employees) as well as corporate negligence (mistakes on the part of the corporation itself).

The case involves a 1994 suit against HealthAmerica of Pennsylvania filed by a Butler County couple who charged the HMO and its medical personnel with negligence in the premature birth and death of their first child.

"While [HMOs] do not practice medicine, they do involve themselves daily in decisions involving their subscriber’s medical care," wrote Judge Joan Orie Melvin. "We see no reason why the duties applicable to hospitals should not be equally applied to an HMO when that HMO is performing the same or similar functions as a hospital."

Hospitals, and now HMOs, are liable for malpractice in Pennsylvania if they fail to follow four regulations set by the state Supreme Court in 1991: to use "reasonable care" in maintaining safe facilities; to hire only "competent physicians" to monitor all personnel providing medical care within its buildings as to "patient care" and to adopt and enforce "adequate rules to ensure quality care."

The case had been dismissed without a decision by the lower Court of Common Pleas and appealed to the Superior Court. The decision brings the case back to the original court. Health America is considering appealing the decision to the state Supreme Court and will not comment, said Daniel Stefko, HealthAmerica’s attorney from the Pittsburgh-based firm Dickie, McCamey & Chilcote.

Aetna Inc. meanwhile announced Oct. 5 that it would not appeal a federal judge’s decision affirming Texans’ right to sue for HMOs with charges of improper care. The decision by U.S. District Judge Vanessa Gilmore in late September upheld the validity of existing law, but restricted its applicability to "cases in which an HMO actually delivers poor care, not disputes over HMO treatment decisions."

The state, however, will appeal the decision to the Fifth U.S. Circuit Court of Appeals. Although state officials generally prevailed in the decision, they are challenging the finding that Texas independent review process for HMO members violates the federal 1974 Employee Retirement Income Security Act. Certain ERISA provisions exempt from state regulation health plans that are sponsored by self-insured employers.

Through a spokesman, state Attorney General Dan Morales defended the right of citizens to be protected from lawyers or accountants or persons not qualified to make medical decisions on their behalf.

"Members of HMOs also should have the security in knowing that there is a remedy if HMOs make coverage decisions that adversely affect their health care," spokesperson Ron Dusek said

While Aetna, Morales’ office and the state Department of Insurance "are working together to ensure the review process stays intact, state officials and the insurer are at odds whether the review should be binding.

Dallas Morning News, Oct. 6, Ft. Worth Star-Telegram, Oct. 6, Pittsburgh Post-Gazette, Oct. 10

Washington, D.C., curbs runaway Medicaid expenditures, but expands rolls by 15,000

WASHINGTON, D.C.—With the highest per capita spending on Medicaid of any jurisdiction in the country, Washington, D.C. last year cut spending by $20 million to $852 million and is projecting even further cost savings, according to the district’s Medicaid chief, Paul Offner.

"We clearly are spending much more than we need to be spending," he said. "I actually think we can go further with the efficiencies we’ve effected to date. We’re still one of the most expensive Medicaid programs in the country."

At the same time, the program is expecting an increase of 15,000 to its current caseload of 123,000, he said.

Officials attribute the cost savings to increased use of Medicaid managed care, cutting hospital reimbursement, seeking alternatives to nursing home services, and stricter enforcement of Medicaid eligibility rules. Congress last year increased the federal government’s contribution to D.C. Medicaid from 50% to 70% of total spending.

Health officials wary of the budget cutbacks point out that the health status of poor D.C. residents, particularly men, ranks at the bottom of the nation.

Medicaid spending in D.C. grew an an annual rate of 16% and doubled overall during the first half of the decade. Experts pegged the program as the most expensive per capita in the county, even when compared to those with similar demographics.

But the District’s doctors and hospital officials, who have borne the brunt of the pressure of reduced spending, say the savings come at a time when the health status of D.C. residents is almost at rock bottom. Men in Washington have nearly the shortest life span of any population group in the United States. In 1990, the 57.9-year life expectancy of black men in D.C. ranked only above that of a native American tribe in South Dakota.

"They’re really cutting, cutting, cutting," said Gary C. Dennis, President of the Medical Society of the District of Columbia. "But do we have more patients with tuberculosis on the streets? More patients with AIDS who haven’t been diagnosed? What is the savings achieved? Has it improved health care in the city? That will be my indicator."

The chief of the D.C. Hospital Association is similarly cautious. "Hospitals are hopeful it will work out well," Robert A. Malson said. "But whenever the city tries to enroll a massive number of people in a new program, it takes a while for the community to become familiar with the process."

Washington Post, Oct. 3

Hospice reimbursement to be based on location of service, not provider’s office

WASHINGTON, D.C.—Reimbursement for Medicaid hospice services must be based on where the service is given, not the provider’s office location, the Health Care Financing Administration (HCFA) has clarified in a letter to state Medicaid directors.

The Medicare hospice wage index adjustments published in the Aug. 8, 1997, Federal Register will be used to determine payment for hospice services, according to the letter from HCFA Director Sally Richardson. Medicaid directors are instructed to make any necessary retroactive billing adjustments for the period Oct. 1, 1997, through Sept. 30, 1998.

The requirement stems from an interpretation of the Balanced Budget Act of 1997 (BBA), which establishes the payment methodology for Medicare hospice services. HCFA is reminding hospice providers that Medicaid hospice reimbursement is determined using the same methodology as Medicare, and thus is affected by the BBA.

The BBA’s Medicare hospice benefit periods do not apply to Medicaid, but HCFA notes that many state Medicaid programs adopt the Medicare benefit for ease of administration. The new Medicare hospice benefit periods consist of two 90-day periods followed by an unlimited number of 60-day periods.

— Health Care Financing Administration release, Aug. 13

Quality of most Michigan nursing homes deemed inadequate by federal, state officials; state may mandate consultation

DETROIT—Almost 95% of Michigan’s 450 nursing homes are not in substantial compliance with federal quality regulations, according to the results of the latest Health Care Financing Administration review released in September. Release of the facility-specific information came after a suit by the Detroit Free Press against the state’s Department of Consumer and Industry Services.

Since January 1998, the Michigan Department of Consumer and Industry Services has used a new computerized scoring system, called the Resident Protection Initiative, to identify and evaluate the poorest-quality nursing homes in the state. The most serious offenders can be directed to hire consulting assistance from the Michigan Public Health Institute, a quasi-governmental nonprofit organization led by Michigan Department of Community Health Director James Haveman.

During its first eight months of operation, the scoring system has spurred an order for consulting assistance at about 70 homes. In addition, the state has temporarily denied payment for new admissions at 35 homes, temporarily banned all admissions at 11 homes, appointed temporary advisers or managers at 16 homes, and imposed increased state monitoring at 47 homes.

Quality in Michigan’s nursing homes has been the subject of federal and state scrutiny. Michigan Attorney General Frank Kelley in February brought 71 felony charges against three nursing homes and nine employees for patient care violations. The cases have not yet gone to trial. Meanwhile, the Michigan House of Representatives is forming a task force to investigate nursing-home care in hearings around the state. The goal of the task force, to be chaired by Rep. Thomas Kelly, D-Wayne, is to draft comprehensive reform legislation for next year.

A U.S. General Accounting Office report is investigating whether regulators in Michigan and three other states—California, Texas and Pennsylvania—adequately enforce federal nursing home laws. The report is expected to be published in January.

Industry officials defended the quality of care at their facilities. "The vast majority of homes are providing good care and people need not feel anxious about that," said Reg Carter, executive vice president of the for-profit industry trade group, Health Care Association of Michigan.

Detroit Free Press, Oct. 7