The money will:

• Fund a financial modeling tool and report that will analyze several factors, including where current uninsured people will access health care coverage, how many will enroll in the Medicaid program and what that will cost the state, how many will enter the individual or group markets and how small businesses will be impacted.
• Provide follow-up research and analyses, as suggested by the direction and inquiries made by the Legislature and the Governor.
• Consider the various options available to the state, including participating in a regional exchange, which could include other states.
• Plan the coordination of eligibility and enrollment systems across Medicaid, the Children’s Health Insurance Program (CHIP) and the health care exchange itself.

The health care exchanges are at the center of the nation’s new federal health care law and are envisioned as a forum where consumers can find competitively priced health policies.

“Insurance exchanges will help to lower costs for individuals and businesses, provide long overdue protections from insurance company abuses, and make the experience of purchasing health insurance much easier and simpler,” Bingaman was quoted as saying in a news release issued by his office.

As of 2008, the latest figures available for New Mexico, 23 percent, or 450,000 of the state’s roughly 2 million residents, were without health insurance, according to a September 2009 announcement by the state’s Human Services Department.

In recent years New Mexico has held the dubious honor of coming in second only to Texas in the number of its residents who are uninsured. The uninsured rate in Texas according to 2008 figures was 24.9 percent.

But 2009 uninsured rate figures for New Mexico are expected next month thanks to the U.S. Census, HSD spokeswoman Betina Gonzales McCracken told The Independent on Tuesday.  And the state’s uninsured rate could rise over the 23 percent rate recorded in 2008, she said.

Given the state of the economy and the growing unemployment in New Mexico through much of 2009 it’s difficult to envision a scenario in which McCracken isn’t right.

Sen. John Arthur Smith, D-Deming, told The Independent he’s already preparing for the possibility that Congress, even if it acts, won’t cover the full $160 million the state budgeted in anticipation of the federal dollars.

But in Georgia, Gov. Sonny Perdue has already ordered leaner state agencies to cut another 4 percent in spending starting next month because the state’s new budget relies on federal stimulus dollars that might not come, the Atlanta Journal-Constitution is reporting.

So far Congress hasn’t acted, leaving New Mexico, Georgia and two dozen other states that assumed the extra federal dollars would arrive in a potentially worse financial trouble.

In other words, New Mexico’s $160-million budget gap could grow to $320 million if Congress doesn’t act. The New Mexico Legislature anticipated the arrival of $160 million in the extra Medicaid dollars in this year’s budget.

Georgia’s budget hole is larger—some $375 million, according to the Atlanta Journal-Constitution—and the cuts are spread far and wide.

Georgia’s governor exempted K-12 schools from the latest cut, but not the university system, the Atlanta paper said.

The latest cut “will affect agencies that hand out driver’s licenses, educate college students and run parks, prisons and health care programs that cover more than a 1 million Georgians. Those agencies employ about 90,000 people,” the Atlanta paper reported.

The cut is expected to save Georgia $25.5 million per month, the Journal-Constitution quoted the Georgia governor’s office as saying.

While Georgia is acting as if the federal dollars don’t arrive, New Mexico has yet to make decisions on what to do in event of a worst-case scenario — that no extra Medicaid dollars come down.

“There’s a lots of conversation going on,” Betina Gonzales McCracken of the New Mexico Human Services Department told The Independent on Friday.

McCracken’s boss, Human Services Secretary Katie Falls, has explained the situation to three different interim legislative committees this summer, so lawmakers know what’s going on, McCracken said. State officials also are working closely with New Mexico’s congressional delegation in Washington to keep tabs on the issue.

“We’re discussing this and trying to figure out what difficult decisions we may have to make,” McCracken said of an ongoing dialogue between the Gov. Bill Richardson‘s administration and state lawmakers.

“Maybe Congress does come up with the funds,” McCracken added. “If it happens before November, then that will help tremendously.”

But at some point the state will have to alert the hundreds of thousands of New Mexicans who rely on Medicaid that their services might change if Congress doesn’t act before sometime in November.

“We can’t wait ’til the end of the year,” she said.

Even partial Medicaid funding would mean a big loss for New Mexico, McCracken said.

Hundreds of thousands of New Mexicans rely on the government program. The state already is looking at ways to trim the program’s costs in the years before 2014, when the nation’s new federal health care law picks up nearly all of New Mexico’s Medicaid costs.

A majority of the $115.4 million, about 60 percent, was gotten through withheld wages, according to the paper.

The striking figure here is the amount of money the state took in from unemployment checks. The state’s net of $8.2 million from unemployment checks easily bested collections through that method in the previous fiscal year — $3.8 million — and $1.2 million in the fiscal year before that, the paper quoted a spokeswoman for the state’s Human Services Department as saying.

A department official told the paper that taking a portion of an individual’s unemployment check to pay for child support might appear uncaring, but custodial parents often rely on the monthly allotments to survive financially.

“While it may seem insensitive to collect from unemployment benefits knowing that the non-custodial parent is unemployed, it is even more difficult to know that these collections often don’t cover the full amount of the monthly support obligation,” Stephen Klump, acting division director said in a statement. “That, often times, causes the non-custodial parents to fall behind in their payments and leaves custodial parents short of their monthly support obligation.”

That decision, which is part of New Mexico’s ongoing effort to prune health care costs, came down earlier this year after the state got a sense of the financial health of many New Mexico hospitals.

It did that, in part, by relying on a little-known report issued in January that found the state’s investor-owned hospitals reported a collective profit of nearly 10 percent in 2008, a profit margin that outpaced similar groupings of hospitals in Texas, Oklahoma, Arizona and Colorado — and easily beat the national average.

“It wasn’t the only thing we looked at,” Carolyn Ingram, the state’s Medicaid director, said of the report commissioned by the state Human Services Department and that surveyed the state’s for-profit hospitals; nearly a third of the state’s 42 medical centers are investor-owned.

Other factors the state considered in making the decision were what other states paid for similar services and where costs were increasing, Ingram said.

But the report, completed by the Hilltop Institute, a think tank at the University of Maryland, played a role in the decision to cut the reimbursement rate used to pay hospitals for outpatient radiological services.

And that bothers Jeff Dye, executive director of the New Mexico Hospital Association.

“Ownership status should not be part of the discussion,” Dye told The Independent. “The key focus, as the Medicaid agency is looking at cost-saving measures, should be around fair and adequate payment to all hospitals.”

State looking for ways to cut Medicaid

The state’s reduction of what it reimburses hospitals for outpatient radiological services is merely one of dozens of actions the state has taken – or is considering taking – as New Mexico tries to trim Medicaid, the government’s low-income health insurance program.

Like many other states, New Mexico is under severe budget pressure, and Medicaid is one of the state’s big-ticket programs, especially as more and more New Mexicans enroll in the program because of the sour economy.

Cost-saving measures already under consideration include asking about 45,000 New Mexicans living below the poverty line to pay $75 monthly premiums for health insurance and requiring co-pays from low-income New Mexicans who use emergency room services.

And there could even more painful options ahead if Congress doesn’t pass a six-month extension of federal Medicaid stimulus dollars. No congressional action would leave New Mexico with a $160 million hole in the state budget that starts July 1.

Hospitals aren’t immune from the pain given the state’s budget crisis — a fact Dye acknowledges.

“The agency is rightfully looking at many options,” Dye said. “We just like to be in the discussion.”

But reducing reimbursement payments to hospitals for outpatient radiological services could be only the start.

New Mexico currently is studying whether to change how it reimburses hospitals for many outpatient services, Dye said.

The state likely won’t know until next month whether the potential change in reimbursement is revenue-neutral – meaning hospitals as a group won’t lose money — or whether it will cost them while saving the state money, Ingram said.

If the change results in some hospitals feeling more pain than others  “perhaps a phase-in over two or three or four years would be better,” Dye said.

As for the decision to reduce the reimbursement payments made to hospitals for outpatient radiological services, the state tried to strike a balance between costs savings and the hospitals’ financial health, Ingram said.

The state almost lowered the payments to the rate used by Medicare, the federal health insurance program for the elderly. Medicare pays much lower rates than Medicaid.

“We didn’t go to the Medicare rate because it’d be too much of a hit,” Ingram said.

For-profit hospitals in NM did well in 2008; not as well in 2007

A general picture emerges about the financial health of New Mexico’s investor-owned hospitals from the Hilltop Institute’s report.

In addition to doing well financially in 2008, New Mexico’s investor-owned hospitals stacked up well against medical centers in the four neighboring states, reporting a collective profit margin of 9.18 percent — second only to Colorado that year.

New Mexico’s investor-owned hospitals didn’t perform as well in 2007, reporting the smallest aggregate profit margin among the five states in the region, the report shows.

The Maryland-based think tank used data from an annual report by the American Hospital Association (AHA) to come up with the profit margin for New Mexico’s investor-owned hospitals as a group.

That annual AHA report “presents historical data on a variety of measures, including revenues and expenses on a state-by-state and national basis.” But it doesn’t “provide detail at the individual hospital level.” So one can’t see how well, or how poorly, individual hospitals are doing year in, year out.

And that’s a problem, Dye said.

“Overall it’s pretty consistent that a third of hospitals lose money (each year), a third break even and a third make money,” Dye said. “The problem is that different hospitals are in different categories in different years.”

“It’s really a concern if policy makers look at categories by ownership or outliers … to make broad policy,” Dye added.

UPDATE: The Hilltop Institute report, and the underlying American Hospital Association report on which it is based, surveyed the profitability. or revenue after expenses, of all of New Mexico’s hospitals, not just investor-owned ones.

Families eligible for receiving the grant money are those with children, individuals with disabilities or chronic illness and the elderly, an agency news release said.

“Families that use propane spend more money heating their homes than those using natural gas or electricity and families using either propane or fire wood are often not able to afford crucial safety inspections or repairs to keep their homes and themselves safe from fire and asphyxiation hazards,” Katie Falls, Human Services Department Secretary, was quoted as saying in the department news release.

The state was one of three states to win the Residential Energy Assistance Challenge Program (REACH) grant from the U.S. Health and Human Services Department’s Administration for Children and Families, according to the agency.

“The REACH grant has the potential to help many of the 15,000 people who received assistance through the Low-Income Home Energy Assistance Program (LIHEAP) for propane and wood burning stoves this past year,” Falls said in the news release.

The federal money will help assist eligible New Mexicans with purchasing fuel and increasing the energy efficiency of their homes, according to the state agency’s news release. That would include:

Funds for the purchase of bulk fuel,

Assistance with partial or complete cost of installation/safety inspections,

Assistance with partial or complete cost of repairs to home heating system,

Home energy audit, and

Assistance with partial cost of improving the energy efficiency of a home (could include sealing, insulation, or installation of programmable thermostat).

“The activities are designed to prevent energy crises for families, encourage responsible energy efficiency behavior, and encourage household payment,” Falls was quoted as saying in the release. “Eligible households will receive immediate assistance with fuel costs, but will also receive assistance with increasing the energy efficiency of their home by being provided both information and financial assistance with improving energy efficiency.”

According to the news release, the state’s human services agency will work with HELP-NM Inc., a non-profit Community Action Agency, to “complete a needs assessment, determine eligibility of participants, determine services to be provided, provide outreach services, educate participants, provide payments to or on behalf of eligible participants and conduct follow-up with participants.”

State officials conceded this week if the cost-saving measure were adopted it could push some of the more than 45,000 low-income adults making $903 or less a month off New Mexico’s health care rolls.

“They would lose coverage,” Human Services Department (HSD) spokeswoman Betina Gonzales McCracken said of individuals who might find paying monthly premiums financially out of reach.

The proposal, one of dozens under consideration, would apply to a program once viewed as a way to lower the state’s high uninsured rate, which is second only to Texas –the State Coverage Insurance (SCI) initiative, which New Mexico started several years ago.

The idea already is running into opposition from state lawmakers who say demanding $75 a month from individuals who might not be able to afford it would limit access to health care.

“I know we have a tough budget,” said Rep. Danice Picraux, D-Albuquerque, and chairwoman of the Legislative Health and Human Services Committee. The panel is charged with studying health care issues between legislative sessions.

“I can’t tell them where they should be cutting or re-directing money, but it’s not my first choice,” Picraux said.

Ideas to cut costs

The idea of making low-income residents pay their own premiums is part of the New Mexico Human Services Department’s ongoing attempt to address ongoing budget pressures.

It also is a reminder of how harrowing the state’s path over the next three years is as it struggles to provide health care for its poorest residents before 2014, when the federal government swoops in to assume most of the costs under the new federal health care law.

While the individuals targeted by the proposal live at or just below the federal poverty level, they currently make too much to qualify for Medicaid, the government’s low-income health insurance program. Under the new health care law, they would automatically qualify for Medicaid in 2014, when the new law expands eligibility to individuals who earn 133 percent of the federal poverty level.

State Medicaid director Carolyn Ingram told the Independent on Tuesday that the idea of doing away with premium assistance for this population is only a suggestion, and that no final decisions have been made.

But she acknowledged that the state is considering that idea and others, including charging low-income residents nominal co-pays for emergency room services, because the state’s Medicaid program is under severe budget pressures. Medicaid is a primary funding source for the SCI program.

New Mexico’s budget crunch

A confluence of factors is creating the financial pressure.

First, state officials project that the number of New Mexicans, adults and children, using Medicaid and Children’s Health Insurance Program (CHIP) will grow by 8 percent between this past December and June of next year, from 479,000 to 518,000 individuals. CHIP provides health care for low-income children from families that make too much to qualify for Medicaid.

Currently New Mexico pays roughly 20 percent of Medicaid costs, thanks to federal stimulus dollars. The federal government picks up the other 80 percent. But paying one fifth of the costs is a struggle because of lagging revenues, state officials say.

Add to that the fact that federal stimulus dollars now helping New Mexico pay for Medicaid run out in December, unless Congress extends the deadline. If Congress doesn’t extend the federal Medicaid stimulus dollars, New Mexico will have a $160 million budget hole for the year that starts July 1. That’s because the state budget the Legislature passed in March assumed congressional approval of an extension and budgeted $160 million in the anticipated dollars to help cover costs.

It’s unclear whether Congress will pass that extension.

So, in essence, New Mexico faces a double whammy: find money to replace the lost federal dollars while trying to figure out how to address the growing enrollment in Medicaid and CHIP.

Financial strain on SCI

All those budget pressures are placing a strain on the State Coverage Insurance program, which is funded both by federal and state dollars, Ingram said.

The program was always envisioned as a way to extend health care coverage to New Mexicans who either didn’t have it because their employers didn’t provide it or because they made too much money to qualify for government programs.

Because it’s not an entitlement program, the federal government caps how much New Mexico can spend in federal dollars on the program. At the same time the state is running short of money.

“Unfortunately with the state budget, we are running out of both pots of money,” Ingram said.

Currently the state picks up the $75 monthly premiums for more than 45,000 adults across the state, making them eligible for New Mexico’s State Coverage Insurance program.

But the budget pressures are making the state’s assistance increasingly difficult, she said.

A federal website should be up and running by summer to provide consumers general information on the various insurance plans offered in New Mexico and available to individuals and small businesses.

“By October it will give benefits and how many denials this plan has compared to other plans,” Katie Falls, the state’s Human Services Department secretary, said Thursday.

The web portal from the U.S. Department of Health and Human Services is envisioned as a way to help consumers navigate the health insurance options available to them.

The website also will help New Mexicans determine if they qualify for a variety of existing public programs, including Medicaid – the government’s low-income health insurance program – and Medicare, the government’s health care program from the elderly, according to a U.S. Health and Human Services Department fact sheet.

Some health care advocates already are embracing the concept.

“Getting an informed consumer base is important,” said Barbara Webber, executive director of Health Action New Mexico, an organization that is working for accessible, affordable and accountable health care in the state.

Webber lauded the idea Friday as a way of giving more people access to important information that will aid them in their hunt for health care.

“A lot of people just grab insurance and say this will cover me in a catastrophe,” but then they run into problems, Webber said.

Webber hoped the web site would be a step in the direction of helping New Mexicans not only learn about various plans but also how to compare them against one another, she said.

The fact sheet makes clear that the government’s web portal is a work in progress.

The portal goes online July 1 and at that point will provide general information on available coverage options by state and zip code in the private market, according to the fact sheet.

By October the web portal will provide more detailed pricing and benefit information, according to the federal agency. The government is already beginning to collect that information from the insurance companies offering the plans.

The benefit and pricing information includes premiums, cost-sharing options, types of services covered, coverage limitations, and exclusions. Health insurers also are required under new regulations to provide pricing and benefits information within 30 days of offering a new product or plan, according to the federal agency.

The government will announce the address of the new website.

The patient information in the laptop included name, health plan identification number, which in some cases is the individual’s social security number, and a provider identification number but not the name of the provider, the agency said.

The agency sent out a message today saying that it was in the process of notifying 9,500 New Mexicans who use its Medicaid Salud plan of a possible security breach.

The agency has set up ways for those potentially affected to learn more:

In addition to sending member notification letters, the agency has set up a toll-free call line through DentaQuest, 1-877-453-8424, to take questions from individuals who may have been affected by this incident. The call line will be staffed from 9:00 a.m. to 5:00 p.m. MDT, Monday through Friday.

For individuals who are interested in placing a fraud alert on their accounts; instructions are provided in the member  notification letter or individuals can call the toll- free number above or visit the HSD web site at www.hsd.state.nm.us.

The agency reported that “The computer was password protected but otherwise did not have safeguards to prevent unauthorized access to the information.  At this time, the stolen car and laptop have not been recovered and it is not known whether the information on the laptop has been accessed.”

The agency said it was launching its own investigation. In addition, the theft and security breach has been reported to the U.S. Department of Health and Human Services.