State highlights: Texas company keeps Medicaid contract despite fraud; seattle minimum wage; Conn. housing for those with mental illness

A selection of health policy stories from Texas, Washington state, Connecticut and New York.

The Texas Tribune/New York Times: Faulted In Medicaid Fraud, Company Keeps Contract
For nearly five years, a state contractor allowed workers with limited expertise to approve dental claims for Texas' Medicaid program, the joint state-federal insurer. State spending on orthodontic services spiraled out of control; by 2012, federal and state auditors found that the contractor's actions had opened the door for a "massive Medicaid fraud scheme" that cost taxpayers hundreds of millions of dollars (Aaronson, 5/1). 

Los Angeles Times: Seattle Mayor Proposes $15 Minimum Wage
A day after Republicans in the U.S. Senate quashed an effort to raise the federal minimum wage to $10.10 an hour, Seattle Mayor Ed Murray announced a proposal Thursday for a $15 municipal minimum wage that he said would "improve the lives of workers who can barely afford to live" in this high-tech city on Puget Sound. Declaring it a "historic" day for progressives seeking to address the issue of income inequality, Murray laid out his complex and controversial proposal, which would be phased in over several years at different rates for large and small businesses. At least initially, income from tips and employer-provided health insurance would be taken into account (LaGanga, 5/1).

The Associated Press: Conn. Will Stop Housing Mentally Ill In Nursing Homes
Connecticut officials have agreed to stop housing dozens of mentally ill people in certain nursing homes, ending an eight-year legal fight over what advocates for the disabled called the needless institutionalization and isolation of the mentally ill. The advocates and officials with three state agencies signed off three weeks ago on a proposed settlement of a federal class-action lawsuit, according to court records obtained Thursday by The Associated Press. On Wednesday, U.S. District Judge Alvin Thompson in Hartford scheduled a fairness hearing on the settlement for July 1 (Collins, 5/2).

The Associated Press: Lawmaker: Debt May Sink Some Health Care Providers
A New York lawmaker says thousands of health care providers could be without jobs if the state Workers Compensation Board doesn't step in to help with problems stemming from a 2009 bankruptcy. Queens Sen. Tony Avella, chair of the social services committee, is asking the board on Thursday for a six-month extension for companies that employ the workers to come up with a way to pay $188 million in debt from the Health Care Providers Self Insurance Trust bankruptcy (5/1).