Kaiser Daily Health Policy Report Highlights State Medicaid Developments
Summaries of developments related to state Medicaid programs appear below.
- Georgia: Georgia has agreed to a $6 million settlement with Eli Lilly in a lawsuit alleging that the drugmaker illegally marketed the antipsychotic Zyprexa, the Atlanta Journal-Constitution reports. The drug is approved by FDA to treat schizophrenia and bipolar disorder. Several states sued Lilly for marketing the drug as a dementia treatment. The suit also alleged that the firm misled doctors and patients about the drug's side effects -- including diabetes, high blood sugar and excessive weight gain -- and seeks reimbursement for related care. Georgia Attorney General Thurbert Baker (D) said he opted for the settlement, rather than pursuing the case in court, because he calculated that the settlement would be about twice the amount of the states' related Medicaid claims. According to Baker, the entire settlement for the state is more than $15 million, $9 million of which will be used to reimburse the federal share of Georgia's related Medicaid claims. Although 30 other states have agreed to the settlement, 12 states have decided not to seek a settlement and have filed their own suits seeking "massive damage awards," the Journal-Constitution reports (Rankin, Atlanta Journal-Constitution, 4/29).
- Idaho: U.S. District Judge Justin Quackenbush of the East District of Washington County, Idaho, on Tuesday issued a temporary order blocking Medicaid hospital payment cuts scheduled to take effect May 1, the AP/Idaho Statesman reports. The Idaho Department of Health and Welfare approved the cuts to meet budget reductions required by Gov. Butch Otter (R). The cuts would have reduced Medicaid reimbursements by as much as 55%. The move was challenged in court by 16 Idaho residential rehabilitation agencies, which represent more than 50% of the state's residential rehab patients. The agencies said the payment cut would put them out of business and diminish care for more than 2,000 beneficiaries, conflict with federal law and violate state law because the payment structure was not signed off on by the state Legislature. Quackenbush gave attorneys for each side three weeks to prepare briefs on how the case should proceed (Dvorak, AP/Idaho Statesman, 4/28).
- New York: New York state Attorney General Andrew Cuomo's (D) office recovered more than $263 million in improper Medicaid payments last year, according to a report filed Wednesday with the federal government, Long Island Newsday reports. That amount is the second highest the state has recovered -- the $273 million recovered by former Attorney General Eliot Spitzer's (D) office in 2005 is the record for the state. Half of the recovered money will go to the federal government and the rest will be divided between the state and counties. The state will qualify for as much as $300 million in federal health care funding as a result of the recoveries (Amon, Long Island Newsday, 4/30).
- Pennsylvania: A proposed reduction in Pennsylvania's Medicaid spending would exacerbate financial problems already faced by state hospitals, according to a study released Monday by the Hospital and Healthsystem Association of Pennsylvania, the Pittsburgh Tribune-Review reports. The state Legislature and Gov. Ed Rendell (D) are considering reducing Medicaid hospital payments by $75 million in the fiscal year 2010 budget. Lawmakers estimate the cut would save the state about $34.1 million, with the rest of the $75 million coming from lost federal matching funds. The hospitals say that as increasing numbers of uninsured patients or those covered by public health insurance programs come to emergency departments for care, hospitals are unable to recoup the costs of treating them through investments and private insurers, as they have done traditionally. According to the report, hospital profit margins fell by 12.8% during the past 18 months as a result of the decreasing value of investments. The report also found that the state's acute care hospital industry is no longer profitable. Rep. Doug Reichley (R) said that giving hospitals the money they seek in the budget would require taking the money away from something else (Wereschagin, Pittsburgh Tribune-Review, 4/28).
- West Virginia: The redesigned West Virginia Mountain Health Choices Medicaid program, intended to improve the health of beneficiaries while reducing the cost of care, has led to reduced coverage for thousands of state residents, according to a report by the Institute for Health Policy Research at West Virginia University, the Charleston Gazette reports. Under the program, Medicaid beneficiaries who sign a pledge stating they will see their doctor regularly and take medications as directed, among other things, are enrolled in an "enhanced" benefits plan, which offers increased benefits from their previous Medicaid plan. Those who do not sign the contract are automatically enrolled in a "basic" benefits plan, which includes less comprehensive benefits than their previous Medicaid plan. The report -- for which researchers conducted interviews with state officials, health care providers, patient advocates and other groups in 2008 and 2009 -- found that 131,000 beneficiaries in the state are eligible for the enhanced plan, but 19,000 are enrolled. According to the report, 10% of eligible adults and 13% of eligible children have enrolled. The researchers concluded that the low enrollment numbers resulted from a lack of understanding among beneficiaries. The report recommends that officials consider whether certain beneficiaries, such as those with mental health problems, should be exempted from the program. It also recommends restoring benefits for the basic plan to traditional Medicaid levels. State officials said they needed to review the report before commenting (Charleston Gazette, 4/30).