State roundup: Feds deny Hawaii Medicaid hospital limit; Ariz. prison health care gets operator; States consider ins and outs of health law implementation

A selection of state health policy stories from Hawaii, Arizona, Wisconsin, California, Texas, Oregon and New York.

Kaiser Health News: Capsules: Feds Reject Hawaii's 10-Day Medicaid Hospital Limit
The Obama administration has rejected Hawaii's proposal to limit most adult Medicaid recipients to 10 days of hospital coverage per year, which would have been the strictest in the nation. Instead, Hawaii has been approved to implement a 30-day hospital coverage limit starting July 1, state and federal health officials say (Galewitz, 4/3).

Arizona Republic: Arizona Prisons' Health Care To Be Run By Pa. Company
Arizona's Department of Corrections awarded a $349 million, three-year contract Tuesday to privatize health care for prison inmates that will cost the state $5 million a year more than it spent in 2011. The contract to privatize prison health care -- originally pushed by Rep. John Kavanagh as a way to save the state money -- was awarded to privately held Wexford Health Sources Inc. of Pittsburgh (Ortega, 4/3).

Arizona Republic: Arizona Lawmakers Question Health Pact
Seven members of Arizona's congressional delegation have demanded the Department of Defense answer questions about its decision to select UnitedHealth Group over a Phoenix-based company for a lucrative military health-care contract. In a letter sent this week to Defense Secretary Leon Panetta, Arizona members of the U.S. House of Representatives wanted to know how the federal agency evaluated the competing proposals and considered the costs associated with swapping contractors (Alltucker, 4/3).

Milwaukee Journal Sentinel: Wis. State Employee Benefits Cost More Than Neighboring States
The estimated cost of providing health benefits to state employees in Wisconsin is higher than in surrounding states, even with employees paying a larger share of the cost, according to a study released Tuesday by HCTrends. The study is based on the estimated costs in Wisconsin and the other states. For Wisconsin, the study used the average of the cost of health plans available to employees, not the actual cost based on enrollment in specific plans and the cost of those plans. But the average came close to the actual figure. HCTrends estimated that Wisconsin will pay on average $13,972 a year to provide health insurance to a state employee (Boulton, 4/3).

California Watch: Long Beach Managed Care Firm Under Civil, Criminal Investigation
A Long Beach-based health plan seeking new contracts to serve 54,000 Southern California low-income seniors has set aside $125 million to resolve claims by state and federal authorities that it overbilled Medi-Cal and Medicare (Jewett, 4/4).

Healthy Cal: State Launches Smaller Program For Adult Day Health Care
Monday's launch of California's new, smaller adult day health care program unleashed an emotional torrent of relief and anger for thousands of current clients and their providers after more than a year of threatened closures, lawsuits, patient assessments, rushed timelines and maddening uncertainty. ... More than 80 percent of about 35,000 existing clients have been approved for the new program. Original estimates by the state were that just 50 percent would be found eligible (Perry, 4/3).

States are also grappling with the implementation of the health reform law:

The Texas Tribune: Report: Texas Businesses Wary of Health Care Reform
Texas business owners have "significant doubts" about the federal health care law being considered by the U.S. Supreme Court, according to a report released Tuesday by the state comptroller's office.Nearly two-thirds of the 919 business owners surveyed -- members of either the National Federation of Independent Business or the Texas Association of Business -- said they feared the law, if upheld, would be bad for business. ... Most respondents to the survey were businesses with fewer than 25 employees. Seven percent had more than 100 workers (Park, 4/3). 

Lund Report (an Ore. news service): Oregon's Health Care Co-op Receives $57 Million In Federal Startup Funds
With support from the federal government, a second consumer owned and operated health plan is on its way to becoming a reality in Oregon and could begin enrolling members by January 2014. Known as Community Care of Oregon, it received $57 million in grant and loan funding last week from the Centers for Medicare and Medicaid Services. … Funding for health care co-ops was a last-minute addition to the Affordable Care Act after the public option didn't get off the ground. Congress set aside $6 billion to create nonprofit health plans with the stipulation that members be able to elect the board and have a voice in how those plans are run -- similar to credit unions (McCurdy, 4/3).

The Wall Street Journal: Troubled Firm Wins Health Exchange Bid
The company the Cuomo administration has hired to design a state health-insurance exchange has been dogged by critical audits and lawsuits in the U.S. and abroad. The state Department of Health awarded the five-year contract to Virginia-based Computer Sciences Corp. in mid-March, state officials said. Its main duty will be developing a major local element of President Barack Obama's medical care overhaul: an online New York marketplace of insurance plans (Gershman, 4/3).