Ohio Health Policy Review

CMS OKs additional payment to Ohio hospitals for Medicaid expenses

After lobbying from Gov. Ted Strickland, officials at the federal Centers for Medicare & Medicaid Services have given the go-ahead to a state plan to pay hospitals an additional $87 million this year for the care they provide to low-income Ohioans on Medicaid (Source: “Feds OK plan to let hospitals recoup Medicaid expense,” Columbus Dispatch, July 15, 2010).

The bulk payment, which will be disbursed to hospitals by the end of this month, and a 5-percent increase in Medicaid reimbursement fees effective in October were included in last year's state budget to let hospitals recoup some of the money they were losing through a new state franchise fee.

The fee is projected to cost hospitals statewide $718 million over the two-year budget ending June 30, 2011. The two provisions aimed at offsetting that expense will let hospitals recoup $569 million, according to the Ohio Hospital Association.

Strickland asks state agencies to prepare tighter budgets for next biennium

The Strickland Administration yesterday asked government agencies to submit spending proposals for the next biennium budget that are 10 percent smaller than current levels (Source: “Blueprints for spending sought from state offices,” Toledo Blade, July 16, 2010).

Agencies also were asked to submit separate budgets that hold spending for fiscal years 2012 and 2013 at current levels. However, neither plan would be sufficient to completely address a budget shortfall that some have estimated could be as large as $8 billion, or 16 percent of the current $50.5 billion, two-year budget.

"Some programs will be held harmless and will continue to see current funding," she Strickland spokesman Amanda Wurst said. "Some will see increases. Some will see cuts putting them between 90 percent and current levels, and some will see cuts of more than 10 percent. This is just the traditional beginning of the budget planning process."

Ohio Budget Commission begins looking into state deficit

In its second meeting, the State Management and Planning Commission heard from Strickland Administration officials that the state’s economy is in “recovery mode,” an assertion that was met with skepticism by the Republican legislators sitting on the six-member bi-partisan panel organized to look for solutions to a state budget deficit that is projected to be as large as $8 billion by 2012-13 (Source: “Official: Ohio in 'recovery mode',” Columbus Dispatch, July 8, 2010).

State Budget Director J. Pari Sabety told the panel during her presentation, titled “Ohio's Budget: Steady Fiscal Control in Turbulent Times," (pdf, 18 pages) that the state’s employment picture is stabilizing and the 2010 budget ended with a $139 million balance.

Before Sabety spoke, the commission heard from an official with the National Conference of State Legislatures, who said that other states are facing even worse budget deficits than Ohio. Compared to other states, some of which have projected budget gaps as large as 45 percent of their current budgets, Ohio is expected to have a gap of about 16 percent of its 50.5 billion budget, according to Todd Haggerty of the NCSL. However, a presentation from the Council of State Governments concluded that the state's overall economic and competitiveness performance is "sub-par."

The commission is scheduled to meet again July 20. Between now and mid-August, Rep. Vernon Sykes, D-Akron, co-chairman of the committee, said that the panel is soliciting any group or individual to submit reports and recommendations that could be used to deal with the next budget.

Ohio Supreme Court hears arguments in Tabacco fund case

Two years after Gov. Ted Strickland and the General Assembly made plans to reallocate most of the money in the Tobacco Use Prevention and Control Foundation, the state’s highest courts heard arguments on whether elected officials had the power to do so (Source: “State's tobacco 'raid' debated before Ohio Supreme Court,” Columbus Dispatch, July 7, 2010).

The foundation’s attorney argues that because the fund, which was established in 2000 using part of Ohio’s $10.6 billion share of a settlement between cigarette companies and states, was created with the goal of combating tobacco use, politicians could not use the funds for other purposes.

Lawmakers have earmarked $230 million of the foundation’s $260 million toward expanding Medicaid coverage for low-income children and the state’s attorney argues that the money can be used for any purpose that elected officials chose.

A ruling in the case is expected in several months.

Tobacco tax hike unlikely in Ohio

Since 2009 16 states and the District of Columbia have raised cigarette taxes and at least a half-dozen more are considering doing the same this year, but there is apparently little interest in raising the tobacco tax in Ohio (Source: “Little interest so far in higher cigarette tax in Ohio,” Mansfield News Journal, April 8, 2010).

Health advocates are pushing tobacco taxes as a way to dissuade smoking and a means to bridge the state budget shortfall. Shelly Kiser, advocacy director for the American Lung Association of Ohio, said doubling the tax to $2.50 a pack would bring in an extra $347 million in revenue a year.

But Gordon Gough, vice president of the Ohio Council of Retail Merchants, said adding to smokers' financial strain may decrease smoking, but would then drive state revenue downward. "There is a tipping point to where too much tax decreases revenue," he said.

State Sen. Dale Miller, D-Cleveland, sponsored a bill last year to raise the tax on non-cigarette tobacco products for the first time since 1992, from 17 percent to 54 percent. The bill died in committee.

"Right now there's a pretty big reluctance to raising taxes," Miller said. "It's not a popular thing to do."

Ohio Medicaid to get up to $750 million from federal unemployment bill

The federal bill that would extend unemployment benefits includes a provision that would give Ohio’s Medicaid program an additional $600 million to $750 million in federal funds (Source: “Unemployment bill comes with Medicaid aid,” Business First of Columbus, March 11, 2010).

The bill passed in the Senate Wednesday and now heads back to the House for agreement on amendments.

The bills adds a $25 billion, six-month extension to the increase in federal Medicaid payments that was part of the last year’s stimulus package. According to Centers for Medicare & Medicaid Services data retrieved by Sen. Sherrod Brown’s office, the federal share given to Ohio for Medicaid was increased about $1.2 billion last year, to $9.9 billion, out of the state’s $14 billion program.

The exact amount given to Ohio will be determined by the number of Medicaid enrollees in the state.

State shifts $4.3 million to home care, assisted living for Medicaid-eligible seniors

The state Controlling Board approved earlier this week the shifting of an additional $4.3 million of state funds to home care and assisted living for low-income seniors (Source: “Extra money will speed care to low-income seniors,” Columbus Dispatch, March 9, 2010).

The move comes two weeks after Gov. Ted Strickland authorized nearly $500,000 in state funds, which halved the waiting list for services for Medicaid-eligible seniors. Both the original amount and the new funds are being shifted from money originally earmarked for nursing-home care but it no longer needed. The transfer of funds does not jeopardize the availability of nursing-home care for those who need it.

Budget cuts mean state trauma registry not being analyzed

State officials say that because of budget cuts, Ohio’s trauma registry is so underfunded that staff is unable to analyze the data for people critically injured in car crashes, fires and shootings (Source: “State's trauma registry can't be analyzed,” Columbus Dispatch, Feb. 1, 2010).

The number of state employees working on the 11-year-old registry, which is housed at the state Emergency Medical Services division, has been cut from three to two, at the same time that the number of records has increased from 24,000 a year to 40,000. 

"When the legislation was written they simply didn't imagine the work entailed in getting the data back out and using it appropriately," said Tim Erskine, state trauma coordinator.

Tobacco fund fight heading to Ohio Supreme Court

The fight over whether the state can spend its $258 million tobacco settlement funds for other state programs is heading to the Ohio Supreme Court (Source: “$258M from tobacco settlement for Ohio held pending court,” Toledo Blade, Jan. 7, 2010).

Washington-based anti-smoking organization American Legacy Foundation is seeking to appeal last week’s court ruling that the state was free to use the money for other purposes.

The money was set aside nearly 10 years ago for smoking treatment and cessation programs. The state is planning to use it instead to fund county adult and child protective services, optional Medicaid programs such as adult dental care, and expanded health-care coverage for children.