Clip files / Local news from the states
Clip files / Local news from the states
This column features selected short items about state health care policy.
Missouri Blues, state officials agree on plan to create health care foundation
ST. LOUIS—Missouri’s largest charitable health care foundation will be created from an agreement reached in early January between Blue Cross and Blue Shield of Missouri. The agreement, which has the support of some 100 consumer groups but the opposition of a Jefferson City judge, transfers all the assets of the insurer into a newly created Missouri Foundation for Health. Terms of the agreement call for the foundation to receive $12.8 million in cash and 15 million shares of Blue Cross’ for-profit subsidiary, RightChoice Managed Care Inc. of St. Louis. Those shares, which represent an 80% stake in RightChoice, were worth about $200 million based on the stock’s price at the time the agreement was announced.
The foundation will be led by a 15-member board, with members yet to be chosen.
Crucial to the settlement was an agreement by Blue Cross and state officials to withdraw suits pending against each other in Cole County Circuit Court. The judge in these suits twice has rejected settlement agreements, arguing that the foundation should receive more money in the deal.
The agreement is contingent on shareholder and regulatory approvals, as well as resolution of a separate suit filed by policyholders. Missouri Attorney General Jay Nixon said he hoped the foundation would be operational in six months and anticipated that it intends to award grants equal to about 5% of its assets each year.
—St. Louis Post-Dispatch, Jan. 7
Wisconsin legislators consider expansion of external review mandates
MADISON—Wisconsin legislators are considering expanding the state’s external review mandates beyond managed care organizations to include all health benefit plans.
To be eligible for review under AB 518, the decision must relate to the plan’s denial of treatment or payment for treatment that the plan determined was experimental, or be predicated on the determination that a service did not meet the plan’s requirements for medical necessity or appropriateness, health care setting, or level of care or effectiveness.
The measure was approved by the Assembly 94-3 and sent to the Senate for consideration.
—Wisconsin Legislative Web site: http://www. legis.state.wi.us/1999/data/AB518hst.html; Dec. 7
Washington state rules speed up review of health plan denials
OLYMPIA, WA—Consumers in Washington state can speed up the process when health plans reconsider denials of care, thanks to a new rule scheduled to go into effect Dec. 30, 1999.
The rule adopted by State Insurance Commissioner Deborah Senn does not replace other built-in appeals for the consumer, but does allow a treating doctor to identify a situation as an emergency, requiring the insurer to complete the review within 72 hours. Under the rule, the reviewer would have to be someone not involved in the first denial, knowledgeable about the condition and with the training, and have experience and expertise to render a competent decision.
In addition the rule requires the carrier to cite the actual clinical reason for the denial and prevents the carrier from penalizing any doctor who advocates for his or her patient in the review.
—Business Wire/NewsEdge Corp., Dec. 1
California Medi-Cal fraud estimated at $1 billion annually
LOS ANGELES—Simplicity and lax oversight of California’s Medicaid program cost taxpayers an estimated $1 billion annually, say investigators in FBI’s Sacramento office. "What we have here is a system that was designed to pay out money fast so that nobody’s health care would suffer," says James Wedick Jr., supervisor of the corruption and health care fraud unit in the FBI’s Sacramento office. "When you do that, it leaves itself open to abuse and misuse and fraud."
The crackdown has led to the arrest of 73 persons. The majority of those charged are of Armenian or Middle Eastern descent, leading community leaders to seek assurances that ethnic communities are not being targeted.
—Associated Press/NewsEdge Corp., Dec. 2
Georgia to re-examine community-based care for mentally ill and mentally retarded
ATHENS, GA—Reported abuses by local agencies caring for Georgia’s mentally retarded and mentally ill residents don’t necessarily invalidate the move to decentralize such services, says a legislator involved in the effort and subsequent investigations into its aftermath.
"We’ve decided that it wasn’t a system failure because of [decentralization]; it was a system failure that existed before the community service boards came into existence," said Rep. James Martin (D-Atlanta).
Georgia legislators have been examining whether a 1994 law that decentralized the funding system for services and gave people choice about who provides those services contributed to abuses by the Northeast Georgia Community Service Board in Elberton. Several employees have left or been fired, many facing criminal charges.
A panel studying the problem is expected to provide a report suggesting action during the spring legislative session.
—Atlanta Journal-Constitution, Nov. 15
Indiana creates separate program to expand children’s insurance coverage
WASHINGTON, DC—Indiana officials hope to insure 12,000 children with the creation of a separate Children’s Health Insurance Program (CHIP) initiative recently approved by the Department of Health and Human Services.
The plan amendment brings to 48,000 the number of children Indiana hopes to cover by September 2000. It creates a separate program for children below age 19 in families with income levels between 150% and 200% of the federal poverty level (FPL).
The current FPL for a family of four is $16,700. The benefit package will be equivalent to the standard Blue Cross/Blue Shield preferred provider option offered under the Federal Employees Health Benefits Program.
Families’ copayments for the separate SCHIP program will be computed on a sliding scale based on income levels, with cost-sharing not exceeding 5% of the families’ income. There are no cost-sharing requirements for American Indian/Alaskan Native children.
—HCFA release, Dec. 22
Healthy hospital industry in NJ demands closure of some facilities, says panel
NEWARK, NJ—Overcapacity in New Jersey’s hospital industry could cost as much as $1 billion annual and puts state facilities "at a staggering competitive disadvantage in today’s health care marketplace," stated a 52-page report from the Advisory Commission on Hospitals.
As many as half of the 30,000 beds in the state’s 82 acute care hospitals are empty on any given day, according to the report, a function of changing patterns of utilization and other pressures common to the industry nationwide.
Trimming the number of beds in existing hospitals will be inadequate to address the problem, added the report.
"Closing entire hospitals, as opposed to across-the-board downsizing, offers much more potential for improving the financial condition of the state’s hospitals as a whole.
"Remaining hospitals will gain additional patients and will likely be able to treat them without significantly increasing their fixed costs," the report said.
—Star-Ledger, Nov. 10
HCFA extends comment period on proposed privacy regulations
WASHINGTON, DC—Public comments on proposed privacy regulations implementing provisions of the Health Insurance Portability and Accountability Act will be accepted through 5 p.m. February 17. The deadline previously had been set for Jan. 3. (See "Proposed privacy regs would allow trolling’ through patient records," State Health Watch, Dec. 1999, p. 1).
NASHP offers guidance for improving health services for children in foster care
PORTLAND, ME—The National Academy of State Health Policy has published case studies of nine states’ efforts to improve the delivery of health services of children in foster care.
Also available is a summary of resources for states to use for addressing the issue.
States profiled are Alaska, California, Colorado, Iowa, Maine, Massachusetts, New York, Texas, and Utah. A copy of the case studies is available to government and nonprofit entities for $20, and available to other entities for $35. The description of resources available to states is $30 for governments and nonprofits, $50 for other entities.
The academy can be reached at (207) 874-6524.
—NASHP release, Dec. 27
Mann to oversee family and children’s services at HCFA
WASHINGTON, DC—Cindy Mann is the new director of the family and children’s health program group within the Health Care Financing Administration. Her responsibilities will include oversight of Medicaid and CHIP policy and operations for children and families. Ms. Mann formerly was in the national policy staff of the Center for Budget and Policy Priorities.
—Center for Budget and Policy Priorities release, Dec. 6
Florida Medicaid overpaid Humana, other HMOs almost $16 million, says Inspector General
WASHINGTON, DC—Florida Medicaid overpaid Humana HMO approximately $4.7 million and other HMOs another $11.2 million in calendar year 1996, according to a report recently released by the Office of the Inspector General (OIG). Approximately $8.8 million of the overpayments represents the federal contribution to Medicaid.
The OIG recommends that the Florida Agency for Health Care Administration recover the overpayments made to Humana and, after further investigation of the other overpayments, recover those as well. The amounts of the estimated overpayments are based on statistical samples of payments made to Humana and other HMOs.
The Medicaid overpayments were made on behalf of beneficiaries who were enrolled in both a Medicare HMO and Medicaid, so-called "dual-eligibles." The payments were made for services that should have been covered in Medicare HMO but were billed for separately in the Florida Medicaid fee-for-service system. The overpayments were made because Florida officials did not use Medicare’s Group Health Plan database to identify Medicaid beneficiaries who also were enrolled in a Medicare HMO, Inspector General June Brown Gibbs said in a Dec. 16 letter to Health Care Financing Administration (HCFA) Administrator Nancy-Ann DeParle.
The OIG rejected the contention of officials from the Florida Agency for Health Care Administration that the state’s data sharing agreement with HCFA prohibits Florida from sharing data to recover duplicate payments.
"If there is any doubt . . . in using the data for recovery of duplicative payments, the agreement allows the State the latitude to work with HCFA officials to initiate an appropriate data sharing agreement to recover any overpayments identified," she said.
A copy of the full report, "Medicaid Fee-for-Service Payments for Services on Behalf of Beneficiaries enrolled in Medicare Health Maintenance Organizations," is available at http://www.hhs.gov/progorg/oas/ reports/region4/49701168.pdf or by contacting the OIG Office of Public Affairs at (202) 619-1343.
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