State Watch
Psychiatric News
Volume 38 Number 13 page 11-44

Two Republican state legislators have come out in favor of new taxes to enable the state to provide health and other services in Oregon. The June 8 issue of The Oregonian contains a commentary by Rep. Ben Westlund in which he reflects on his recent bout with lung cancer and writes, "Oregon is facing its own life-and-death struggle, and it's not up to some surgeon. . .to save her. It's up to us." He continues by saying, "It's unacceptable to Oregonians that we are denying lifesaving medical services to our most frail and vulnerable populations. . .permanent, stable, sustainable, and fair revenue also is part of the big-picture solution."

In the same issue, Rep. Max Williams wrote in a commentary, "Today, Oregon is the most dependent of any state in the country on a single source of volatile tax revenue to pay for its government. . . A sales tax devoted to schools offers stability and fairness. . . . As a lifelong Oregonian, I recognize that many of us have the 'no sales tax' gene in our genetic sequence. I also know, when presented with the facts, it's possible to move forward."

Williams is chair of the Oregon House Judiciary Committee and a member of the House Revenue Committee.

An editorial in the same issue comments on Westlund's statement. "A growing number of lawmakers are privately coming to the conclusion that Oregon's crisis demands their leadership and requires them, as Westlund says, to "do the right thing, right here. . . right now."

Beginning in January 2003, state officials made severe cuts in mental health services, including outpatient and substance abuse benefits for 100,000 low-income residents (Psychiatric News, April 4).

Numerous stories about the impact of budget cuts on health services are posted on the Web at <www.oregonian.com>.


To settle a 2002 lawsuit, Florida's Medicaid program agreed last month to explain to beneficiaries any denials for prescription drugs and set up a process to handle beneficiaries' appeals of such denials, according to the Web site <www.kaisernetwork.org> on May 29.

In March 2002 five Florida Medicaid beneficiaries and an organ transplant recipients' group filed a federal lawsuit against the state's Medicaid program, alleging that a new formulary program has resulted in illegal denial of prescription drugs.

Under the state's program, doctors can prescribe medicines to Medicaid beneficiaries from a preferred drug list only if they obtain authorization. Psychotropic medications are exempt from the restrictions.

The suit, filed in federal district court in Miami, did not challenge the restrictions, but claimed that Medicaid beneficiaries should get advance warning of the denial and a chance to appeal before drugs are denied.

Under the settlement, Florida will begin an ombudsman's office to manage drug-denial appeals. The ombudsman will attempt to resolve the issue in three days. Upon the ombudsman's failure to do so, the beneficiary can file a formal complaint. The state also will begin to give beneficiaries written explanations of drug denials and will let the beneficiaries continue to take the drug during the appeals process.


In May the Minnesota Psychiatric Society (MPS) sponsored the forum "Inaccessible Care: The Mental Health System in Crisis," in conjunction with the annual Walk for Mental Health.

Addressing the audience at the outdoor meeting were Mike Hatch, the state's attorney general; Mike Tessner, Minnesota's CEO for state-operated services; Michael Trangle, M.D., the associate medical director of behavioral health for Health- Partners Inc.; and Sue Abderholden, NAMI-MN executive director.

APA President Marcia Goin, M.D., told the audience about the cost shifting to the criminal justice system that occurred when inpatient psychiatric beds were cut in Los Angeles County.

The League of Women Voters of Minnesota, the Minnesota Medical Association, and the Education Network for Mental Health and Mental Illness co-sponsored the forum.


The Web site <www.kaisernetwork.org> reported on May 15 that Nevada's new budget includes funds to expand the psychiatric observation unit at a public mental health center; to move people with mental disabilities from out-of-state institutions into residential settings with job training; to establish and staff a mobile unit to visit emergency rooms in LasVegas to determine whether patients should be admitted to state mental health facilities; to help finance a new psychiatric hospital in Las Vegas; and to increase payments for community training centers.


The Center on the States commissioned a survey of 771 state lawmakers throughout the country about plans to address problems resulting from budget deficits. Researchers found that most state senators "are reluctant to consider all but the least painful or least revenue-producing measures, such as higher 'sin' taxes on tobacco or increased fees." Lawmakers identified social services, including health care programs and corrections and transportation projects, as the most likely targets of cuts.

States face collective budget deficits approaching $80 billion for the fiscal year beginning July 1.

The center, a nonpartisan research organization funded by Pew Charitable Trusts, is the parent organization of >Stateline.org<. Survey results were reported May 27 at <www.stateline.org/story.do?storyID=307507>.


Terry Jones, the prosecuting attorney in the 4th Judicial District in Arkansas, followed that warning with the statement, ". . .we don't have the doctors to diagnose them or give the medicine."

In the past 18 months, psychiatric units in four communities had closed, leaving the state with 15 community mental health centers and the Arkansas State Hospital.

In 2001 only six other states, all with lower populations, had fewer public psychiatric beds for adults than Arkansas, according to a National Association of State Mental Health Program Directors survey.


The Texas House and Senate on June 1 voted to approve a $118 billion, two-year budget that would cut benefits, increase premiums, and impose stricter eligibility requirements for the state's Children's Health Insurance Program (CHIP), according to <www.kaisernetwork.org> on June 3.

Approximately 170,000 children, onethird of current CHIP beneficiaries, will become ineligible for the program. Currently, children in a family of four with an annual income of up to $36,800 qualify for the program. The budget cut is supported by Gov. Rick Perry (R).


On May 28 President Bush signed a law (HR 2) that includes $10 billion to increase the federal matching rate for Medicaid by 2.95 percentage points until October 2004.

A bipartisan group of governors from the National Governors Association (NGA) has been meeting with representatives of the Bush administration to reach a compromise about Medicaid "reform."

A previous administration Medicaid reform plan announced last January was not supported by the NGA and was characterized by APA as a step "in the wrong direction, providing incentives to states that ultimately will result in reduced coverage" (Psychiatric News, March 7).

APA is working with a special Medicaid Task Force of the Mental Health Liaison Group to communicate mutual concerns to the NGA and to Congress about new proposals. In mid-June APA and other mental health advocates met with key staff of the Democratic Governors' Association and of NGA to present their views about how changes in Medicaid might affect people with mental illness.

Rep. Heather Wilson (R-N.M.) has been appointed chair of the Congressional Medicaid Task Force. She has supported nondiscriminatory coverage of treatment of mental illness, including efforts to change the Medicare funding formula for outpatient psychotherapy services.


In Fiscal 2003, 21 states are planning to expand or establish a preferred drug list (PDL) in which physicians must obtain approval before prescribing drugs not on the list. The Kaiser Commission on Medicaid and the Uninsured released a study in April about implementation of such lists in California, Georgia, Oklahoma, Oregon, and Washington.

Researchers found that there is limited monitoring of the effects of PDLs on patients and physicians; regulation is minimal of the use of PDLs by managed care companies with Medicaid contracts; and PDLs are less controversial when their procedures are viewed as credible by stakeholders.

"Prior Authorization for Medicaid Prescription Drugs in Five States: Lessons for Policymakers" is posted on the Web at <www.kff.org/content/2003/4094/>.

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