Arizona will also reduce Medicaid coverage for childless adults. The state simply doesn’t have enough money to operate SCHIP or continue to cover so many adults without children.

Arizona’s budget shortfall for 2011 is $2.6 billion. “Arizona is navigating its way through the largest state budget deficit in its long history,” Governor Jan Brewer told the New York Times. “With my signature on this budget, the first major step to recovery has been taken.” Arizona voters will decide in May whether to pass a one-cent sales tax increase for three years.

Cutting SCHIP is controversial, to say the least.

How is SCHIP doing in Texas? According to the Dallas Morning News, the program is $72 million short in the current two-year budget.

“Pay for performance? Fuggeddaboutit! Congress keeps its automatic pay increase, and taxes, inflation, deficits, and the national debt all rise. Down Independence Avenue, Health and Human Services (HHS) bureaucrats get automatic pay raises and universal “outstanding” performance ratings.

(Footnote: take a laptop with you into HHS headquarters and its serial number is logged in and out by an armed guard. Apparently, so many employees are stealing government-owned laptops that “something” had to be done. But hey — they aren’t just stealing from the taxpayers, the elderly, and their doctors any more! Now, where was I …)

Meanwhile, my hometown paper reports that cardiologists have reduced morbidity of heart disease by thirty percent in the past ten years. Their reward? HHS gives them a pay cut. But wait, there’s more. In addition, HHS plans to cut its reimbursement rate by an arbitrary 21% for all physicians who accept Medicare patients. From all appearances, Nancy Pelosi thinks that’s fine.”

On the one hand, he criticized it, calling the so-called opt out provision for states “classic Washington bait and switch,” because citizens would still have to pay for it. On the other hand, Perry said he’s unsure whether Texas will reject the plan.

“Until we see more clearly what Washington’s plan is relative to this,” he told the Houston Chronicle, “our options are open.”

Under Obama’s reform plan, millions of uninsured Americans would receive coverage under Medicaid. USA Today reported that Medicaid and the State Children’s Insurance Program (SCHIP) would expand to cover over 60 million Americans in 2019, an increase of 10 million. As expected, such an expansion would burden states already dealing with budget constraints, as well as increase pressure on primary care physicians.

Texas is considering expanding SCHIP to add 768,000 children and Medicaid to add 1.5 million adults over the next 10 years. To pay for such a massive overhaul, states will have to come up with more money. What would the fundraising look like? Higher taxes for citizens and lower payment rates for providers, for a start.

Last February, President Barack Obama issued a memorandum lifting SCHIP restrictions. Among the changes were dental care for children who don’t receive it under private insurance plans and an option for states to eliminate a five-year waiting period for pregnant women and for immigrant children to become eligible for the program.

USA Today reports that under Obama’s health care reform plan, Medicaid and SCHIP would expand to cover over 60 million Americans in 2019, an increase of 10 million. As expected, such an expansion would burden states already dealing with budget constraints, as well as increase pressure on primary care physicians.

Texas is considering expanding SCHIP to add 768,000 children and Medicaid to add 1.5 million adults over the next 10 years. (Source)

Take advantage of this opportunity to have your voice heard by emailing Pam McDonald with HHSC at pam.mcdonald@hhsc.state.tx.us by 5:00 p.m. on Friday, August 7, 2009.

• The proposed rates are based upon models developed by Deloitte Touche in 1997 and updated using data from the 2007 ICF/MR cost reports inflated to the 2010-11 biennium.

• The proposed payment rate adjustments are based on the rebasing of the ICF/MR models using data from the FY 2007 ICF/MR cost reports; updating of wage and price inflation factors to project expenses to the rate period; and HHSC reimbursement rules that allow HHSC to adjust reimbursement amounts when it deems such are warranted.

* Direct care wages in the model increase from $8.30 to $8.85/hr
* Direct care trainer wages in the model increase from $8.48to $8.97/hr
* Direct care worker supervisor wages in the model increase from $11.12 to $13.24/hr
* Direct care trainer supervisor wages in the model increase from $11.12 to $12.52/hr
* QMRP wages in the model increase from $16.51 to $18.00/hr
* Nurse wages in the model increase from $18.70 to $20.46/hr

Skilled nursing facilities face a Medicare payment reduction of $360 million as part of a $1.050-billion case-mix adjustment decrease and a $690 million market-basket increase.

Alan Rosenbloom of the Alliance for Quality Nursing Home Care said, “The nursing home community rightly fears the $12-$16 billion in cuts are just the tip of the iceberg. As Congress continues to debate health care reform and searches for ways to fund it, many expect and assume that nursing home care will be targeted again for much deeper cuts.” (Source)

Additionally, nursing homes will see a 3.3 percent cut. Read the CMS press release here.

CMS announced a new rule that updates payment rates and new regulatory framework for Inpatient Rehabilitation Facilities. Jonathan Blum, director of the CMS Center for Medicare Management, said, “The final rule we are issuing today incorporates industry best practices into CMS coverage requirements, while promoting more consistent review of the medical necessity of IRF stays for individual patients in light of their clinical needs. The policies were developed by CMS working closely with medical directors from several fiscal intermediaries, and have been refined in the final rule to respond to public comments on the proposals.”

Today, July 24, 2010, professional rates (RNs, LVNs, OTs, PTs, etc) will be discussed at a public hearing.

3 stages of implementation

1. 9/1/09: Professional service rate changes begin
2. 10/1/09: Remaining rate changes begin (allocation of the ad/op fee)
3. Summer 2010: The case management monthly fee will be eliminated with the part of the $221 fee going to the MRAs and the rest remaining in the program rates.

CMS has directed HHSC to eliminate the current monthly Administration and Operations Fee (Adm & Op fee) and replace with a methodology that allocates these expenses across all HCS services.

How will this directive impact you?

It means that the current monthly “admin& op” fee used to reimburse providers for these admin and operations expenses ($938.62 per consumer per month or approximately $11,263 per annum) is being removed and these expenses will soon (now October 1, 2009) be incorporated into other covered services.

Have your voice heard—important dates:

July 24, 2009: Publish re-proposed rate methodology
August 12, 2009: Public hearing to receive comments on re-proposed rule
August 24, 2009: Public comment period on the rule ends.
September 11, 2009: Adopted rule appears in the Texas Register.
October 1, 2009: Effective date of the rule.

See today’s provider letter for more information.

The salary cut would have saved the state $98 million in 2009 and 2010.

In other provider news, the Supreme Court ruled that California’s Medicaid providers may challenge the state’s proposed cuts to provider fees, upholding a federal court’s ruling.

Earlier this month, we reported that the Texas Senate had approved a bill to increase enrollment in the State Children’s Health Insurance Program, raising the income eligibility limits from $44,000 to $66,000 for a family of four. An additional 80,000 uninsured children would be covered.