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March 5, 2003

To: DHS Employees
Jean I. Thorne, Director

Special budget message

1. Oregon Health Plan prescription coverage
2. Medically Needy
3. Governor's Advocacy Office
4. Staley settlement
5. Long-term care services
6. Children's mental health services
7. Thanks for your work

Yesterday Governor Kulongoski signed legislation to rebalance the state's 2001-2003 budget, which includes restoration of a number of cuts planned or already taken by DHS.

These restorations get us through June 30. There is no guarantee that these services will continue into the next biennium.

Since the action on the budget happened so quickly we may still unearth additional information. If that happens, I'll pass that on in my weekly message this Friday.

Here are the changes:

1. Oregon Health Plan prescription coverage

On March 1, we eliminated prescription-drug benefits to the 100,000 or so clients in the Oregon Health Plan "Standard" program. This legislation restores that benefit.

We cannot immediately reinstate the prescription coverage to these clients.

We first need to reprogram our computers to add back the coverage. First Health, the organization that manages our computer interface with pharmacies, will be reprogramming systems at the same time.

When those changes are complete — some time during the week of March 17 — pharmacists will be able to identify who's eligible and for which drugs they'll receive Medicaid reimbursement.

No reimbursements will be available for drugs dispensed to this population between March 1 and when the restoration is put into effect.

Our Office of Medical Assistance Programs will mail a notice to OHP Standard clients about the restoration of this benefit.

Plan changes. Because of the March 1 elimination of the pharmacy benefit, some managed care plans had decided to no longer cover OHP Standard clients. As a result, those clients have been disenrolled from managed care and placed in fee-for-service plans.

Some of the managed care plans have agreed to take those clients back as a result of the add-back of the prescription benefit. They will be re-enrolled in their managed care plan by April 1.

We haven't yet heard from all of the plans.

2. Medically Needy

The budget bill will restore coverage for some former Medically Needy clients. Coverage will be limited to necessary anti-viral drugs for people with HIV/AIDS and anti-rejection drugs for people who have had transplants.

Limiting the program to this small population means that we won't be able to use Medicaid funds. We will need to set up a state General Funded program instead.

The information we have readily available on Medically Needy clients does not easily identify the clients who get these services. Additionally, various privacy regulations put restrictions on how and when we identify people with HIV/AIDS. We've begun consulting with the Oregon Dept. of Justice to ensure that we implement this state-funded program legally.

We don't expect to have the new Medically Needy program up and running until about April 1.

3. Governor's Advocacy Office

The legislation also included some money to help staff the Governor's Advocacy Office. As you'll recall from my message last Friday, this office has been inundated with calls since we began our budget cuts. They will continue to play a crucial role in helping clients access help where it is available.

4. Staley settlement

The Legislature restored $7.4 million of the $11.9 million cuts planned for the Staley settlement (which provides community-based support to people with developmental disabilities).

Because of budgetary uncertainty, we froze enrollment on Feb. 1. We should be able to keep the program open through the end of this biennium by limiting the growth of any new enrollments.

We are in negotiations with the plaintiffs on possible revisions to the agreement due to the budget crisis.

5. Long-term care services

Clients in service levels 10 - 14 were scheduled to lose their long-term care services on April 1. Many of them would also lose their OHP services as well.

This legislation restores services to clients in levels 10 - 11. Clients in levels 12 - 14 will lose benefits on April 1 as scheduled.

Provider rates. The original budget cuts included reductions in facility reimbursement rates. No provider received a cut because these reimbursement reductions needed Legislative approval, and none was granted. The budget bill provides funding to cover the facility rates.

6. Children's mental health services

The bill restores community-mental health services to more than 3,000 children who aren't eligible for Medicaid.

These services are provided through contracts with county mental health programs. Our Health Services staff will be working with counties to revise contracts to restore this service. Counties will make this service available to these children again as quickly as possible.

7. Thanks for your work

You've worked hard to prepare for and implement these very difficult cuts. As I've said before, we got into this business to help people, not cut off the services they depend on. Implementing these changes has been hard and often heart-wrenching work.

Now many of you will need to undo some of that work. That can be frustrating. Please know that your efforts are appreciated. While we don't always like the actions we have to take on our jobs, it's important that we take our responsibilities seriously and carry out our duties as required.

Thank you.