Federal District Court Bars Medicaid Non-Contract Hospital Payment Rates

A federal district court judge in California November 18th enjoined the California Department of Health Care Services from continuing a 10 percent reduction in the Medi-Cal (California's Medicaid program) reimbursement rate for non-contract hospitals (Santa Rosa Memorial Hospital v. Maxwell-Jolly, N.D. Cal., No. 08-5173 SC, injunction 11/18/09).

At issue in all the cases was the 10 percent Medi-Cal reimbursement rate cut contained in 2008 legislation (A.B. 5) aimed at addressing California's budget deficit. The hospitals argued that the rate cuts violated federal law because they were implemented solely for financial cost savings, and did not take into account a federal requirement that the state DHCS set hospital reimbursement rates to bear a reasonable relationship to hospitals' costs. The courts agreed, essentially finding that the DHCS had to rely on responsible cost studies before it could provide reliable data to justify the reductions. In his order, U.S. District Judge Samuel Conti of the Northern District of California noted that, ordinarily, the court would hold a hearing on the appropriateness of granting the non-contract hospitals' motion for a preliminary injunction barring the cuts. However, largely on the basis of the rulings by a federal district court in Los Angeles in August 2008, and the Ninth Circuit in July 2009, Conti found it was suitable to make his ruling without oral arguments. In July, the Ninth Circuit affirmed the lower court's ruling in Independent Living Center of Southern California Inc. v. Maxwell-Jolly (131 HCDR, 7/13/09).

“Based on the Ninth Circuit's decision, the Court finds that Plaintiffs are likely to succeed on the merits of their claim that these rate reductions violate state law,” Contin wrote. The ruling is available at http://op.bna.com/hl.nsf/r?Open=sfak-7y3unz.



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HHS Using Tougher Standards to Calculate Improper Medicare Payment Rates for 2009

As part of the Obama Administration’s goal of reducing waste, fraud and abuse in Medicare, the HHS and CMS significantly revised and improved its calculations of Medicare fee-for-service (FFS) error rates in 2009. “As we move forward in our review of the Medicare and Medicaid error rate data, we expect to be able to determine if there are specific trends that can better help us identify weaknesses in our programs or systems,” said Acting CMS Administrator Charlene Frizzera. “We hope to be able to use data available through the use of new electronic health record reporting that can help in the design of new and innovative approaches to finding emerging trends and vulnerabilities in high risk areas such as durable medical equipment and home health.” HHS Secretary Kathleen Sebelius and Frizzera also pointed out the HHS and the CMS would invest more time and resources into working with providers to eliminate errors through increased and improved training and education outreach. “It’s important that we continue to work closely with doctors, hospitals and other health care providers to make sure they understand and follow the more comprehensive fee-for-service requirements,” said Frizzera. “We are committed to working closely with them to reduce the rate of improper payments.”
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Senate Health Reform Bill Contains Long Term Services and Workforce Provisions

The newly introduced Senate health reform bill contains the ANCOR-supported CLASS Act, the Community First Choice Option, and other provisions to improve Home and Community Based Services. While the House-passed version contains both of those provisions and a temporary extension of the Recovery Act’s FMAP increase to states experiencing high unemployment, the Senate bill did not include the FMAP bump.

Also of note is Section 6201, which expands an existing nationwide program for national and state background checks on direct patient access employees of long-term care facilities and providers. The provision would require the establishment of a nationwide program for national and state background checks on direct patient access employees of certain long-term supports and services facilities or providers.

Another workforce provision (Section 5507) would establish a demonstration grant program through competitive grants to provide aid and supportive services to low-income individuals with the opportunity to obtain education and training for occupations in the health care field that pay well and are expected to experience labor shortages or be in high demand. The provision would also establish a demonstration program to competitively award grants for up to six states for three years to develop core training competencies and certification programs for personal and home care aides.

ANCOR will be providing further details as staff continue analysis of the bill.

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Reid Presents $848 Billion Health Care Reform Package to Senate

All 2074 pages were introduced on Wednesday and contain provisions (long summary and short summary) that would extend coverage to 31 million Americans. Unlike the House-passed bill, the Senate’s version does NOT contain employer mandates, but employers with 50 or more employees which did not provide health insurance would pay a penalty if workers received government subsidies to purchase coverage through the exchange. The bill also includes and expansion of the Medicaid program eligibility to include people who make up to 133 percent of the federal poverty level.
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Vote to Begin Debate on Health Reform Bill “Patient Protection and Affordable Care Act,” (H.R. 3590) Set for Saturday

Senate Majority Leader Harry Reid (D-NV) has scheduled a vote to begin debate on the chamber’s health care overhaul bill for Saturday night, although it is not definite that Reid has the 60 votes he needs to overcome a Republican filibuster and bring the measure to the floor. Under a unanimous consent agreement reached Thursday, Republicans agreed to waive their prerogative to insist on 30 hours of post-cloture debate if Reid prevails on the procedural question and to forgo a roll call vote on adopting the motion to proceed, which would require just a simple majority to prevail. That could allow senators to begin their Thanksgiving recess on Saturday, rather than Sunday or later. Senate Democrats are attempting to get their version of their bill approved by the Christmas break, but it is unclear whether sufficient time remains on the legislative calendar for that to happen.
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Mid-Year Shortfalls Open a $31 Billion Gap in 35 States

According to an update by the Center on Budget and Policy Priorities, at least 42 states plus the District of Columbia are enacting cuts in major areas of state services—including health care (28 states) and services to individuals with disabilities and the elderly (24 states and DC). The worst recession since the 1930s has caused the steepest declines in tax receipts have led many states to face large budget gaps even after making deep cuts. You can view a table of state-by-state mid-FY 2010 budget gaps at http://www.cbpp.org/cms/index.cfm?fa=view&id=711
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CMS Withdraws Medicaid Rehab Proposed Rule

CMS is withdrawing the proposed rule, “Medicaid Program: Coverage for Rehabilitative Services” originally published in the Federal Register on August 13, 2007 (72 FR 45201). The withdrawal notice will be published in the November 23, 2009 Federal Register. As you will recall, the rule proposed to “clarify the definition of Medicaid ‘rehabilitative services’ [including elimination of rehabilitation services except under certain circumstances], established new documentation [including 15-minute unit billing], and other requirements.”

CMS received a total of 1,845 public comments in response to the August 13, 2007 proposed rule. Congress included a moratorium on this regulation on December 29, 2007 and that moratorium was extended until April 1, 2009 in the Supplemental Appropriations Act of 2008. Before that moratorium was up Congress included a “Sense of Congress” in the American Recovery and Reinvestment Act of 2009 that the HHS Secretary should not promulgate as a final regulation the August 13th proposed rule. CMS has decided to withdraw the August 2007 proposed rule in light of Congressional concerns, public comments in 2007, and in order to assure agency flexibility in re-examining the issues, options, and alternatives with both the Congress and stakeholders.

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New Co-Sponsors for H.R. 868

Rep. Chris Van Hollen (D-MD)and Rep. Tim Bishop (D-NY) signed on as co-sponsors of the Direct Support Professionals Fairness and Security Act of 2009 (H.R. 868). Thank you to everyone who contacted their representative. Read more!

ANCOR Supports Introduction of Legislation to Eliminate the Term of Mental Retardation from Federal Law

U.S. Senators Barbara A. Mikulski (D-MD) and Michael B. Enzi (R-WY) introduced a bill on Tuesday, November 17th that would forever eliminate the words stigmatizing terms of “mental retardation” and “mentally retarded” from federal law books. Senator Mikulski said she was introducing the bill—known as Rosa’s Law—after attending a roundtable on special education last year where a mother told the Maryland lawmaker about how her daughter Rosa was labeled at school and the stigma, pain and anguish it caused her daughter and the entire family. The family reached out to their local Arc and the Maryland General Assembly were legislation was passed substituting the phrase “an individual with an intellectual disability. Senator Mikulski stated on the Senate floor today that she was introducing the “at the request of the family, a law on behalf of this little girl and on behalf of all of the children in the United States of America.... I’ve always thought the best ideas come from the people.” ANCOR joined with scores of other national groups in a letter supporting the legislation that would make the change to “intellectual disability. You can read Senator Mikulski’s entire statement on introducing Rosa’s Law at http://mikulski.senate.gov/record.cfm?id=319975&. Read more!

Additional Federal Fiscal Relief Needed to Help States Address Recession’s Impact or State Could Lose 900,000 Jobs in 2010

A November report by the Center on Budget and Policy Priorities finds that without additional federal assistance, states could be forced to institute additional deep budget cuts and tax increases in 2010. Although states received federal assistance for education, jobs and for their Medicaid programs last year with the passage of the ARRA stimulus, states will face a “cliff” on December 31, 2010 unless additional federal funding is forthcoming. With most governors sending their budget proposals to state legislatures between December and February, state lawmakers will have to pass budgets as early as March or April in some states and by the end of June in almost all states. If states do not know they will receive additional federal fiscal relief, they will begin implementing new budget cuts and tax increases by this summer, at the latest. The CBPP report states that budget projections suggest that states will face total deficits for state fiscal years 2011 and 2012 of as much as $260 billion beyond what can be covered by the limited ARRA funding that will remain available—reducing demand in the U.S. economy by as much as $260 billion. Read more!

Maine revenues continue to slip; shortfall as high as $400M

Gov. John Baldacci has ordered the preparation on an executive order to curtail state spending as state revenues continue to fall below estimates with Finance Commissioner Ryan Low expecting the revenue shortfall now will range between $300 million and $400 million for the two-year budget.

He said when preliminary figures were known late last week, the governor ordered the preparation of a curtailment order to stop state spending under his emergency budget authority. He said the curtailment process cannot make up for the entire revenue shortfall, but it is important to stop spending as soon as possible.

Last month the governor ordered agencies to identify how they would cut spending to meet a target of $200 million. Low said instead of another round of requests, his office will use those as a starting point and in one-on-one meetings with state agencies, push for further spending cuts.

Thank you to Bonnie-Jean Brooks for providing ANCOR with this information. Read more!

Clarification on H1N1 Priority Vaccination Groups

Henry Claypool from HHS said that we expect clarification on the issue of DSPs being considered health care personnel as related to distribution of the H1N1 vaccine in the next couple of days. This should also clarify which individuals with disabilities fall into the priority groups. Read more!

Reid Hopes to Debate Health Reform Next Week

Senate Majority Leader Harry Reid (D-NV) Tuesday night started the process of making a place on the Senate calendar to begin debate next week on the Senate health reform proposal. Republicans are expected to mount a filibuster of the motion to proceed, which if successful would prevent the bill from being debated on the Senate floor. Reid needs 60 votes to overcome the filibuster, and he has been working to secure the votes of all 60 members of the Democratic Conference, given unanimous Republican opposition. Despite the formal calendar process, the timing of the Senate’s health care debate is still in doubt. Reid has given his Members assurances that he would not bring a measure to the floor without a formal cost estimate from the Congressional Budget Office (CBO). The CBO score is expected by the end of this week, but once Reid sees the estimate, he may seek tweaks to the bill that could delay the final score.
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NGA and State Budget Officals Project States Will Continue to Face Fiscal Difficuties in Comming Years.

In a preliminary review of the biannual report The Fiscal Survey of States, officials from the National Governors Association (NGA) and the National Association of State Budget Officers (NASBO) today forecasted continued fiscal difficulties for states. In fiscal 2009, states were forced to reduce General Fund expenditures by 4.8 percent and are expected to reduce fiscal 2010 General Fund expenditures by at least 4.0 percent, marking the first time that state spending has declined in back to back years. The weakening of state fiscal conditions is reflected in the $250 billion in budget gaps faced by states between fiscal 2009 and fiscal 2011. Of the $250 billion, states closed $72.7 billion in budget gaps during fiscal 2009 and $113.1 billion before the enactment of their fiscal 2010 budgets to bring them into balance with drastically declining revenues.

"These are the worst numbers we’ve ever seen in the decades of putting together this report," said NASBO Executive Director Scott D. Pattison. "States have been forced to lay off and furlough employees, raise taxes, drain rainy day funds and sharply cut state spending in ways that impact every part of state government."

Even after closing these gaps, an additional $14.5 billion in budget gaps remains in fiscal 2010, and states face at least $21.9 billion in budget gaps for fiscal 2011. To help close these gaps, 42 states cut their enacted fiscal 2009 budgets by $31.2 billion, and 33 states cut their fiscal 2010 expenditures by $53.5 billion. Additionally, states enacted tax and fee increases of $23.8 billion along with additional increases in other revenue measures of $7.7 billion for fiscal 2010.

"States will continue to struggle over the next decade because of the combination of the length and depth of this economic downturn, the projected slow recovery and the overhang of unmet needs," said NGA Executive Director Raymond C. Scheppach. "The unmet needs are those postponed or deferred during the crisis including, replenishing retiree pension and health care trust funds and financing maintenance, technology and infrastructure investments. States will also need to rebuild contingency or rainy day funds. The bottom line is that states will not fully recover from this recession until late in the next decade."
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If ARRA Federal Increase in Medicaid FMAP Is Not Extended, States Will Be Faced with Tough Choices in 2011.

Federal Medicaid fiscal relief in the ARRA have been critical in helping states to address budget shortfalls, perserve eligibility, avoid or reduce provider cuts, and avoid or soften program cuts. See Kaiser’s October 2009 fact sheet: Medicaid and State Budgets: From Crunch to Cliff.
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Connecticut Budget Update

Governor Rell of Connecticut announced rescissions of up to 5% in various state agency line items at the end of the day November 5. The Governor can make line item cuts up to 5% without need for Legislative approval. The total of the rescissions is $34M. The deficit is now projected at $400M by the Office of Policy and Management (the Governor’s budget office) and at $628 by the Comptroller. The Secretary of OPM stated yesterday that the intention is to balance the budget through cuts, not higher taxes.

Most of the cuts in the human services state agency accounts are in the “Personal Services” line – the account for state personnel salary/wage expense. The DCF residential Board and Care – Foster and Residential and Emergency Services had the largest reductions that have the potential to affect community providers. In DDS, the autism pilot was reduced, but other service delivery accounts were not touched. DMHAS wasn’t cut. DSS cuts include a reduction in “Aid to the Disabled,” a large account. Medicaid wasn’t cut.

The Governor’s press announcement
The proposed rescissions (14 pages)

Thank you to Stan Soby of Oak Hill for providing ANCOR with this update.

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House Passes Health Care Reform

Saturday night the House passed their America's Affordable Health Choices Act of 2009(H.R. 3200) with lawmakers voting 220-215. The Senate has yet to take their legislation to the floor and is still waiting on scoring from the Congressional Budget Office. Remember to look at the Senate legislation very closely as it differs greatly from the Legislation passed in the House. Read more!

House Vote on Health Reform May Be as Soon as Tomorrow

The House of Representatives' first floor vote on health reform may come as early as Saturday. This comprehensive bill, the Affordable Health Care for America Act (H.R. 3962), has important provisions that ANCOR supports.

--Inclusion of the Community Living Services and Supports Act (the CLASS Act), a new actuarially sound, premium-based, national long term services insurance program to help adults with functional impairments remain independent in their communities. This cash benefit would reduce the burden on federal and state Medicaid programs.

--Inclusion of the current American Recovery and Reinvestment Act increase in federal Medicaid payments (FMAP) to states with high unemployment rates for an additional six months.

--Inclusion of a statement of support for the Community First Choice Option to encourage states to cover Medicaid community-based attendant services and supports. (included in manager's amendment)

Your Message: Include the CLASS Act, FMAP increase, and the Community First Choice Option provisions in H.R. 3962-the Affordable Health Care for America Act.

Respond to ANCOR’s Action Alert by entering your zip code in the "Call Now" window to get your Representative's telephone number. All you have to do is make the call, use the talking points, and leave your feedback.

You can also send your Representative an email using the message above. Simply find your Representative's email address using ANCOR's Congressional Directory.

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Medicaid Audits Got Down? ANCOR is Offering a Two Part Series on How Providers Can Survive Audits and Reviews with Barb Edwards. Save the Date!

Did you miss ANCOR's most popular Governmental Activities Seminar preconference EVER?

If you couldn't make it to the September conference, or even if you want to hear it all again and want another chance to ask The Expert, ANCOR is excited to bring you a series of two webinars featuring Barb Edwards and her Medicaid expertise. Ms. Edwards is a principal in Health Management Associates, former interim director of the National Association of State Medicaid Directors, and former Ohio State Medicaid Director.

Dates: November 16th and November 23rd

Time: 2:00 PM to 4:00 PM (EST) both days

Registration Begins Next Week-Watch for Details
(Can't make the date - Order a recording)

Driven in part by Congressional pressure to combat fraud, waste and abuse, there is a growing attention being paid to program integrity within the Medicaid program. Many state and federal players have authority to conduct provider audits or other reviews under Medicaid, and audits have increased. Find out what providers need to know to about the purpose and use of audits and how to prepare for them.

Webinar #1: Medicaid Program Integrity and YOU

Ms. Edwards will take you through the history of Medicaid's focus on program integrity and the federal structure of Medicaid. She will also cover the KEY Medicaid integrity programs, including PERM (Payment Error Rate Measurement) and HHS Office of Inspector General audits, including their purpose, audit protocols, how CMS uses these audits, and MUCH more! You will also hear directly from other ANCOR providers about their experiences. Of course, time will be allowed for "Q and A" with Barb and the provider-presenter.

Webinar #2: Providers and Medicaid Oversight: Getting Ready

Ms. Edwards will give a more detailed look at three federal oversight programs: waiver reviews, the Medicaid Integrity Program, and the False Claims Act. She will also focus on provider readiness for these audits. Again, hear from an ANCOR provider with first-hand experience and take advantage of the "Q and A" session following the presentation.

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FDA Fights False Claims About H1N1 Treatments

There are over 140 drugs, devices and pieces of equipment marketed over the Internet that have landed on a list of fraudulent swine-flu-fighting products compiled by the Food and Drug Administration. It is violation of federal law to market products that claim to prevent or treat H1N1 and that have not been approved by the F.D.A. While most claims about products are so outlandish that they are dismissed, it posses the problem that individuals may have a false sense of protection. Read more!