Each month, this page features selected short items about state health-care policy digested from newspapers around the country.
Clip File
January 31, 1998
8 minutes read
Wisconsin wins federal approval to insure parents as well as children in new BadgerCare program
MADISON, WI—The state of Wisconsin has reached an agreement with the Department of Health and Human Services to use funds earmarked for insuring children to insure parents as well, Gov. Tommy Thompson announced Dec. 16. Under its BadgerCare program, the state will provide subsidized health insurance to low-income families beginning July 1.
About 48,800 low-income residents—22,700 children and 26,100 adults—will be covered under the managed care program which will have the same benefits as Medicaid. The program will cost $69 million the first year, two-thirds of which will come from the federal government.
Families earning up to 150% of the federal poverty level (FPL), or about $20,000 per year for a family of three, will not have to pay any premium. Those with higher incomes will pay 3-3.5% of their income in monthly premiums.
The plan is considered critical to the success of the state’s welfare reform program, Wisconsin Works.
Working families with incomes less than 185% of the poverty level ($24,661 for a family of three) will be eligible unless their employer provides health insurance and pays 80% of the premium. Families can stay in BadgerCare until they reach 200% FPL.
"We are making sure that hard-working families don’t have to go without health care for their children as they climb the economic ladder," the governor said.
The governor acknowledged that BadgerCare could be a draw for poor working families to move to Wisconsin and that it could lead businesses to drop health insurance coverage, but he said the program could be revised if that happens.
The Capital Times, Wisconsin State Journal, Dec. 17, 1997
HealthyStart fails to reduce infant mortality
PHILADELPHIA—After pumping $33 million into poor Philadelphia neighborhoods over three years, HealthyStart has not succeeded in reducing infant mortality, concludes an evaluation of the program. Infants in those neighborhoods are still twice as likely to die in the first year of life compared with infants in other areas of the country.
The federal program, which has spent $540 million nationwide in its first three years, also had little or no impact on infant mortality in most of the other 14 communities where the program operated.
Among the reasons HealthyStart did not reduce infant mortality in Philadelphia, according to experts:
•Despite massive outreach efforts, the program only reached about a third of women giving birth in the target area each year;
• The program wasn’t coordinated with the mandatory Medicaid managed care.
• There was a heavy emphasis on working with community groups, but some had never been in the health business before. One group got nearly $600,000 for a residential drug recovery program before being forced to shut down because of unqualified staff and other problems.
City Health Commissioner Estelle Richman said infant mortality is not the only measure of success. Among the program’s accomplishments—the rate of women who got no prenatal care during pregnancy decreased from 10% to 4% from 1992 to 1996 and the average number of prenatal care visits improved. There were also reductions in the percentage of low-birthweight babies and births to mothers who smoked or drank during pregnancy.
The overall health of children also may improve as they get screenings and immunizations under the program, Ms. Richman said. She added that it’s too early to evaluate effectiveness of HealthyStart in Philadelphia after three years because it took some time to get the program fully running.
Inquirer, Philadelphia, PA, Dec. 23, 1997
Maryland and D.C. Blues win right to combine
but regulators move to protect charitable assets
BALTIMORE—The Maryland and District of Columbia Blue Cross plans won regulatory approval Dec. 23 to combine their business operations, but the approval came with conditions designed to protect charitable assets of the nonprofit insurers and give government authorities more regulatory control.
The combination would create the region’s largest health insurer, covering 2 million people. Terms call for each company to put up $500,000 to create a new nonprofit holding company, which would control the boards of both Blue Cross plans. The two insurers would continue to exist as separate companies, but, over time, would combine sales forces, product offerings and networks of doctors and hospitals.
The order by the Maryland commissioner said that the articles of incorporation for both Maryland Blue Cross and the holding company should specify that, if they are dissolved, their assets would be "distributed to a nonprofit corporation having a similar or analogous purpose." The commissioner also ordered that no executive severance packages can be paid unless both insurance commissioners and an independent consultant have a chance to review them.
However, the orders stopped short of requiring that the Blue Cross plans admit they are "charitable," meaning that all their assets would go to a foundation in the event of a for-profit conversion. The Washington, D.C.-based Fair Care Foundation said it planned a legal challenge to the merger, which would probably be based on the treatment of charitable assets.
Baltimore Sun, Dec. 24, 1997
Minnesota health plans move away from capitation
ST. PAUL, MN—In response to complaints that their methods of paying doctors have undercut care, a number of managed care companies are moving away from capitation and back to fee for service.
Cigna Health Care of the Mid-Atlantic, a large Maryland-based HMO, now pays about 15% of its primary care doctors for each visit or procedure. "As a company, we’re looking at fee-for-service for primaries as the way to go," said Dr. Hames V. Springrose, medical director for the HMO. Even those still on capitation receive extra payments for immunizations and some other services.
Ironically, doctors, many of whom loudly protested the move to managed care, are not necessarily delighted to move back to the older methods of payment—especially because the fee for service rates are lower than they used to be.
"Primary care capitation has gone by the wayside," said Dr. Bernard H. Mansheim, chief medical officer of United HealthCare of the Mid-Atlantic. Minnesota-based United bought Chesapeake Health Plan in 1996 and switched doctors from capitation to fee-for-service, following United’s pattern.
"I think when this is all played out, capitation will be a blip on the screen—still around but in small proportion," said Dr. Ian Cummings, president of the National Association of Emergency Physicians.
But Jonathan P. Weiner, a professor at the Johns Hopkins School of Public Health, believes there will be greater emphasis on developing new models of capitation such as the one adopted by the Maryland Medicaid program, which risk-adjusts the rates based on the patient’s health status.
Baltimore Sun, Dec. 21, 1997.
BCBS of Massachusetts drops 5% cut to hospitals
to pay its share of uncompensated care pool
BOSTON— After an outcry from local hospitals, Blue Cross and Blue Shield of Massachusetts scrapped a plan to cut hospital payments 5.06% in order to meet its obligation to the state’s free-care pool, which pays for uninsured residents.The reduction was originally to take effect Jan. 1.
The state’s attorney general office had put the insurer on notice in December that its cut to hospitals could be in violation of the new law on financing the state’s uncompensated care pool.
The statute requires hospitals, health insurers, and the government to share in the cost of caring for the state’s 766,000 uninsured residents. Hospitals had lobbied to have the government and insurers bear a greater burden in the costs. Beginning in January, insurers are supposed to chip in $100 million a year; state and federal governments, $100 million and hospitals, $215 million.
Boston Globe, Dec. 12, Dec. 31, 1997
BCBS of Massachusetts' reorganization plans, billing practices are under attack from all sides
BOSTON—Blue Cross and Blue Shield of Massachusetts has found itself under fire from all sides in recent weeks—including from federal and state authorities.
The company reportedly agreed last month to pay $10 million to more than 250 private health plans to settle a 1995 lawsuit brought by the US Department of Labor. The Labor Department filed suit against Blue Cross in 1995, alleging the insurance giant collected $180 million in refunds from hospitals on behalf of private health plans between 1985 and 1992, but did not pass those refunds on.
The Labor Department also alleged Blue Cross billed health plans for more than the hospitals actually charged and kept the extra money and that it inflated fees it charged health plans and charged higher copayments than it should have.
The insurer also is battling strong criticism of its reorganization proposal, which Blue Cross says is crucial to its financial survival. The company could save millions of dollars in federal income taxes if it is allowed to split into three businesses—a tax-exempt HMO, an administrative services company, and a traditional indemnity health insurance company. While Blue Cross has paid $24 million to the federal government since 1992, its nonprofit managed care competitors do not have to pay income tax.
But a report by Arthur Andersen, ordered by the state attorney general’s office, says the projected tax savings are "optimistic" and questions whether the assets and reserves allocated to each of the three companies are adequate to protect them in case of financial trouble. The report concluded the reorganization will not solve Blue Cross’s problems, in fact, three separate companies with separate capitalization could make them more "fragile."
Of major concern is Medex, an insurance policy purchased by more than 170,000 residents that covers medical bills and prescription drug costs not paid by Medicare, the federal health insurance program for the elderly and the disabled. By spinning off its profitable HMO business, consumer advocates and state officials fear financially troubled products, which have been buoyed by the more profitable HMO business, would be left on their own. Boston Globe, Dec. 24, 1997, Dec. 31, 1997.
Nevada governor announces expanded program for children’s health insurance, Nevada Check Up
CARSON CITY, NV—Gov. Bob Miller has announced a major expansion of his "Nevada Check Up," a program to provide health insurance to children of the working poor. The state expects to cover 48,000 children under the program and also plans to enroll 12,000 more children eligible for Medicaid.
When first announced in October, the plan called for using $7 million in savings from the state’s Medicaid program to match $13 million from the federal government provided through the new Children’s Insurance Program. But the governor said Jan. 7 that the savings from Medicaid are higher than expected, leaving the state with $16.4 million to match $30.4 million from the federal government.
The program will include dental, prescription drugs, vision and auditory coverage, which were not included in the original package. Enrollment is now set to begin at the end of February with coverage starting in June. The state will pay about $1,000 a year per child for coverage through managed care organizations.
Sacramento Bee, Jan. 11, 1998
Patients with asthma and other chronic problems
have more problems with HMOs, survey shows
SACRAMENTO, CA—Patients with asthma and other chronic health problems, including migraine headaches, diabetes and depression report a much-higher incidence of HMO-related problems than the general population of managed care enrollees, according to a survey by the University of California, Berkeley,
Commissioned by the Governor’s Managed Care Task Force, the survey also found patients with these conditions had a much higher incidence of problems than those with conditions such as arthritis, cancer and lung disease.
"The question has been, are the people who are the highest users and in the worst health experiencing more problems," said Dr. Helen Schauffler, associate professor of health policy at the UC Berkeley School of Public Health. In some cases, she said, "the answer is yes."
The research is the first of its kind in California to break down enrollees’ HMO experiences by condition.
Industry representatives said they would take the survey results seriously, but questioned some of the findings. "We would like to look much closer at the data to see if we can find some guidelines to improve the way health plans provide their services," said Myra Snyder, chief executive of the California Association of Health Plans.
Sacramento Bee, Sacramento, CA Jan. 11, 1998.
Each month, this page features selected short items about state health-care policy digested from newspapers around the country.
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