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November 12-13, 2009 | New York Marriott Downtown, New York City American Conference Institute’s 4th Annual
Drug Pricing Boot Camp Intensive training in essential pricing concepts, methodologies, and strategies relative to key government payor programs • Medicare • Medicaid • PHS • VA • DOD • FSS Industry insights from: Abbott Abraxis Genzyme Graceway Pharmaceuticals NCPDP Taro
“Valuable to both new and experienced pricing professionals.”
Paul LeCompte, Director Contracting, Pfizer (2008 Delegate)
“Content and topics were excellent and the pace of covering material was ideal.”
Dottie Caplan, Manager, Pricing and Contract Strategy, sanofi-aventis (2008 Delegate)
“Everyone provided clear and concise information that will most certainly be delivered to my organization.”
Leaders in government pricing and reimbursement will drill you in the core competencies of prescription drug pricing related to government payor programs and help you: • UNDERSTAND how government prices are established and how the rebate system works • MASTER implementation of the final Medicaid rebate rule • DEFINE key pricing terms • MAKE SENSE of confusing pricing calculations • MASTER key pricing concepts and learn how one price may affect another: - AMP, AWP, WAC, BP, WAMP, CPIU, ASP, FCP and non-FAMP
Danielle Pezzella, Senior Contract Administrator, Taro Pharmaceuticals (2008 Delegate)
Supporting Publication & Valued Media Partner:
As a subscriber of Mostly Medicaid you are entitled to a $500 discount off of the standard price when referencing discount code “MOSTLY MEDICAID Register Now • 888-224-2480 • AmericanConference.com/RxPricingBootCamp
Pharmacy Update Sometimes Medicaid cuts just make it too hard to do business ‐ Walgreens is looking to
Distribution of Impact of DE Rate Cut (In $1,000; Total Cut - $500K)
stop participating in the DE Medicaid program due
reimbursement. The company agreed to $250, 50%
continue filling Medicaid scripts through early August, but said a deal would need to be reached with the state for it to make sense to continue doing business there. Walgreens stands to lose $250,000 on 84% of the brand
All other DE pharmacies
name drugs it supplies to DE Medicaid patients. The state would save a total of $500,000 by reducing rx reimbursement 1%, in an attempt to lessen the $800M budget deficit for DE in FY 2010. 1
Delaware’s FY 2010 Budget Deficit
It looks like the lawsuit centered around Vytorin and Medicaid may be coming to a close, with states getting around $5M from Merck. To recap, Merck buried negative results that
showed Vytorin was no more effective at lower cholesterol than the generic (but was of course more expensive). 2
Who ever thought using AWP for Medicaid pharmacy reimbursement was a good idea? Yet another case with complaints of pharmaceutical companies misreporting the AWP just closed in Idaho. ID Medicaid will receive $660,000 from Boehringer Ingelheim Pharmaceuticals, Inc., Boehringer Ingelheim Roxane, Inc., and Ben Venue Laboratories, Inc as part of the settlement. 3
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More news over at the Mostly Medicaid Blogs
recent entries New use of the old healthcare fraud statute It’s getting ugly‐ cuts across the states Provider taxes everywhere! CMS should reconsider Colonoscopy decision Stimulus strings attached EHR updates Medicaid fraud news
Reimbursement News Times are tight. We give you state by state detail, and throw in a story of providers fighting back a Medicaid cut, and what one group says about the need for a national Medicaid out‐of‐network payment policy. ‐MM Staff
Impact to each California home health worker’s income
$2 per hour
Medicaid Providers Beat Back a Rate Cut In another win for providers in the budget cut war, a CA judge told the Medicaid agency it can not cut rate for home health workers. The decision will cost the state another $98M, but hey‐ that's just a drop in the bucket when you're billions in debt, right? The cut was approved by the CA legislature, but the judge overturned it using provisions of the Medicaid act that require "adequate study of the impact" of cuts. 4
According to the US Supreme Court, providers don’t have to take Medicaid rate cuts sitting down. The CA Medicaid Director argued that docs and members can not use parts of the Medicaid act to fight cuts, but the court said they can. This could be a new weapon for providers across the country as we enter the era of huge budget crises in every state. 5
Impact to California’s state budget deficit
+ $98M more dollars in the hole
FY 2010 M’care Physician Rates DOWN 22%
CMS released the proposed Medicare fee schedule for 2010, and it has docs taking about a 22% decrease in pay rates. The impact could creep into Medicaid, with many states basing physician reimbursement rates on a % of the Medicare fee schedule. 6 Gettin’ Rocky in the Rockies The economic reality may be starting to hit the Medicaid ideal even in CO, though. Medicaid providers will start seeing rate cuts as high as 2% in the next FY in an effort to meet the state budget gap. The total reduction to the CO Medicaid spend is estimated at around $31M.
cutting rates to save $86M in 2009.
Tot. LA Mcaid Cut 2009 $240M
Hospital rates ‐5 to 6%; Physician rates ‐ 10%
Overall, LA Medicaid is reducing its budget $240M. According to the state Medicaid Director (Jerry Phillips) service delivery
won't be impacted since he thinks new efficiencies can make up for it. Hospitals are getting knocked 5‐ 6% on their rates, docs are losing 10%.
Other Savings Rate Cuts
LA Mcaid Cuts ($M)
You can't win for losing. Or something like that. LA is about to lose some of its Medicaid funds from the feds because the insurance checks from Katrina are finally rolling in and bumping up the per capita income. Governor Jindal is pointing out that this doesn't
really affect most of the people who need Medicaid (i.e., their incomes arer not necessarily going up). The FMAP could drop from 73pct to 60pct if LA is not able to make its case with CMS. 8
A national Medicaid policy for out‐of‐network payments? Medicaid Health Plans of America (follow them at twitter.com/MHPA) just paid the Lewin Group to dive deep into issues surrounding Medicaid out of network costs in AZ, CA, FL, GA, MD, NE, NJ, NY, PA, TN, TX and WI. Bottom line‐ when Medicaid members go out of network, it adds up to about 8% of the costs. The main issue Lewin found is related to the number of disputes over these type of costs from hospitals and other providers. According to Lewin, the providers are in a squeeze since they can't bill Medicaid for a huge amount then negotiate it like they do other payers. If you're not enrolled in the Medicaid program as a provider, you can't
By the Numbers This is just about one
submit claims. Lewin points out that there is a federal policy that
of the coolest things we've seen the
sets rates for Medicare out of network costs, and that the Deficit
MEDPAC do in a long time. They just
Reduction Act of 2005 set rates for emergency services for Medicaid
released a book of almost 200 pages of
out of network costs. According to Lewin, it's past due to do the
tables and charts on Medicare data. The
same for Medicaid out‐of network non‐emergency costs. 9
data covers spending, service types,
member demographics and much more.
We put this on the must‐read list here at
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Quality News New CMS Data on Readmits and Death Rates Not so Encouraging Even more data supports the overwhelming need to get readmission costs under control. New info on the Medicare Hospital Compare site shows that 20% of Medicare members who leave a hospital are back within 30 days. Some hospitals have a better handle on it than others, with Baylor Heart and Vascular (Texas) leading the way. According to the TX hospital's CMO, if hospitals across the nation followed
Baylor's lead, at least $2B can be saved annually.
Pneumonia Heart Failure
See the chart for not so
encouraging re‐admit rates. 11 Nat'l 30-Day Re-admit Rate for M'care Patients
CMS has studied 1M deaths and readmissions from 2005 and 2008 and come to the conclusion that some hospitals have a problem. According to the study, 3% of hospitals have heart failure death rates higher than the average, and they are generally located in rural areas. 12
Enrollment Growth News
Medicaid enrollment and expenses could exponentially grow in the Lone‐Star state Talk about increasing enrollment. If the health reform bills in play go through, Texas Medicaid's low income population would go from 38,000 to 1M, with the state taking on $5B in new expenses each year. The expansion would go a long way to covering Texas's 6M uninsured residents. Texas hospitals fear the expansion of Medicaid though, with thoughts of low payment rates keeping administrators up at night. 13
+ $5B in annual Texas Medicaid expenses
Impact of Health Reform Bill on TX Mcaid Enrollment
38,000 Low Income Members
Projected Under Current Health Reform Bill
Maryland Medicaid has added nearly 45,000 more members in the last year, increasing costs $50M in the process. The state under‐projected enrollment increases in the tough economy by almost 50%, and made it easier to get in with higher incomes. 14
Medicaid Expansion / Healthcare Reform (We Couldn’t Not Cover it at All) Readers looking for a peaceful escape from all the loud, repetitive noise about this in recent weeks should skip to the next story. Or maybe try to find the place in this picture. Everyone else who just can’t get enough of the punishment, or maybe can take a few more pages on Health Reform, read on. Fair warning – we are not even going to mention the town hall meetings: Governors Up in Arms It took a while to click, but the Governors across the nation finally realized that "health reform" depends heavily on spending a whole lot more on Medicaid. When the NGA met in MS in July, where other Governors let Sebelius have a piece of their mind about states "paying for yet another Washington mandate." State deficits have now hit crisis levels (24% of their budgets), and health reform bills that change Medicaid rules are not too popular with State officials at the moment. The NGA feels that the Medicaid expansion (largely through changing eligibility rules) would put a new burden on states and create long‐term obligations that could cripple their budgets for years to come. PA alone has a $3.2B deficit this fiscal year. The new Medicaid expansion provisions in the health reform bill would extend Medicaid coverage to all those under 200% of poverty, meaning a family of four could earn nearly $65,000 and receive health insurance coverage under Medicaid. Changing of the rules is currently estimated to
increase Medicaid spending by $438B over the next ten years, but who knows how much it would end up actually costing. (This makes up for 40% of the cost of the "health reform" bill, by the way). With so few details, many are wondering just what is being reformed besides the ways politicians pump more money into Medicaid. Ten years is a long time to project anything as volatile as healthcare spending. CBO says the change in rules would add 11M people to Medicaid. According to the NGA spokesperson, the Governors want to see everyone get healthcare (that's a safe stand to take), but do not want to be the ones to pay for it (and that seems reasonable to us). 15 When NGA met in July, a bit of cold water was officially thrown on the health reform parade. Some governors noted that the health reform bills in play would simply make their states spend more on Medicaid. NGA estimates that there will be a $200B combined state budget
PA alone has a $3.2B deficit this fiscal year
deficit between now and 2012. With this gap‐ and uncertainty over what will happen with Medicaid stimulus money in a few years ‐ governor's are understandably doubtful about placing health reform on the back of Medicaid. Many have come out and called such a move un‐ innovative, with Phil Bredesen (the Democratic governor of TN) saying‐"It's Interestingly, a TIME Magazine article points out that the Mayo Clinic has gone on record saying the health reform bills will hurt ‐ NOT help‐ the cause for increasing quality of care.
a 45 year program originally designed for poor women and their children. It's not healthcare reform to dump more money into Medicaid." A Public Option Will Help Reimbursement Rates?
Oh, yeah. I guess a public plan probably would take currently profitable private insurance customers and have them pay at crappy Medicare rates. At least that's what AHIP is thinking in its new whitepaper that considers the impact of a public plan option on hospital revenues. The study models CA hospitals in particular, and it ain't pretty. The study looks at four different scenarios, with different rates of privately insured customers shifting to coverage under the public plan and different reimbursement rates based on Medicare rates. It also considered what would happen if the reform panacea does not achieve universal coverage and there is still an uncompensated care burden on hospitals. Each of the
scenarios has CA hospitals operating at a net loss, with losses from some scenarios as high as 34% of revenues. Another study from McMillan is noted for its 12
So its not fraud, but its definitely waste‐ calculation of the real costs of inadequate government healthcare reimbursement. According to that study, the
average American family is subsidizing about $1,500 in their
nondescript "accounting mistake that
own healthcare costs just to make up for stingy government
caused the state to inadvertently draw
reimbursement for other people's healthcare. If more people
down $200M in federal funds that it should
move to government healthcare (into the "public" option),
not have. The mistake was caught 8 months
AHIP argues that that burden will increase on the few
later and the stay will be paying back the
remaining families that stay in private insurance plans ‐> and
feds between now and the end of FY 2010.
everyone would eventually be forced into the government plans due to the resulting cost increase. AHIP actually puts it in "exacerbation of cost‐shifting" terms. 16
There's so much sound in the health reform echo‐chamber,
that many of us find ourselves looking for just a few precious moments of silence. Well ‐ the healthcare talking heads won't allow us a break, but at least some people are starting to boil it down for us whose heads hurt. An article by Janet Adamy in the WSJ puts out 10 questions on health reform that really hit the mark. Things like ‐ 'What is the problem with healthcare, anyway? Is it as bad as they say' You may be surprised by some of her answers. She touches on the major points of disagreement (and agreement) in the partisan war we gently refer to as health reform. And she gives some tangible info for the common person with no healthcare background. For example ‐ it was a surprise (to us even) that Deems are considering removing flexible spending accounts (FSAs) as an option for anyone. Overall, Adamy gives a great analysis of the current health reform narrative, including a great assessment of how polling during the engineering of the two
In Hospital News….
bills affected what both sides ending up putting on the table. This one is definitely a Mostly Medicaid Must Read.
Another $230M was blown in NC Medicaid because it took 11 months for the state Medicaid agency to put in the needed cost control measures. The waste was for community services for mental health, more specifically "community support services." While these services were only one option out of 19 service options, they accounted for 97% of the payments. The report from the auditors found Medicaid money being paid for various non‐healthcare services, such as to take kids to the movies or swimming. According to the audit, the state Medicaid agency loosened the cost controls early on to make sure people got services. According to the Medicaid agency director, the regulatory requirements around making a program change require so much time for the public comment period that making a quick change in the cost controls was not possible. Once those cost controls were put 13 in place, the state of NC went from spending $177M a month to spending $30M a month.
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CMS gets serious about fraud with a crazy, Chuck‐Norris style swat team
Whistleblower makes out big
And More! (Seriously, this was a big month for Medicaid fraud news)
The Medicare Strike Force, a.ka. HEAT (We’re not joking) One is tempted to imagine the new Medicare Strike Force as led by Chuck Norris, barging into smoky backrooms will guns drawn. The actual name of the force is the Healthcare Fraud Prevention and Enforcement Action Team (HEAT), and they have been very busy. In one week in July, they reported
6 big cases totaling more than $285M in fraud. Three of the big ones added up to $35M in Houston. According to US Senator Cornyn, Medicare fraud currently bleeds $60B in taxpayer monies each year and is a big proponent of "real‐time surveillance programs" like HEAT. 17 Running the con‐game in the panhandle (sort of) The Florida frauds just keep getting bigger. Another 8 people were indicted on a $100M fraud that had a sophisticated set up of 29 fake storefronts and check‐cashing businesses. The fake storefronts provided the fraudsters with locations for payments to be sent to, with the check cashing operations allowed them to launder the money. The scheme went across 5 states, and included fraudulent payments for HIV and cancer infusion drugs in FL, GA, NC, SC and LA. The payments were made through Medicare Advantage plans, which have more generous coverage than traditional
According to US Senator Cornyn, Medicare fraud currently bleeds $60B in taxpayer monies each year
Medicare coverage. 18 The group was laundering as much as $80k a week through the check cashing stores. The bust comes one month after US Attorney General Eric
Holder increased the Medicare fraud investigation budget to $311M. According to the Miami Herald, more than $2B in Medicare fraud has been identified in Miami alone in the past 4 years. Many of the accused have fled to Cuba, Latin America or Europe. 19 In yet another massive home health fraud scheme, 8 people in Florida have been charged with conspiracy to commit fraud by bribing Medicare beneficiaries for their IDs. They used the IDs to get
more than $22M in payments from Medicare in FL for services never provided. This bust was another win for HEAT (which began in March 2007). Since its inception, the Strike Force has
indicted 257 fraudsters for overpayments of more than $600M. In our final round of applause to HEAT, another huge web of fraud was untangled ‐‐ with 60 people involved in a $50M take. The fraud was driven by paying patients for their IDs to imaginary physical therapy or infusion injections could be paid for by Medicare. Doctors, executives and other fraudsters all were indicted. This was another bust by the Medicare Strike Force. According to the report, the Strike Force has analyzed data and identified, Detroit, Miami, Los Angeles and Houston as "hot spots" for fraud. 20 NY State and One Big Mistake This is a big one ‐ $500M big to be exact. The city and state of NY are handing back half a billion dollars to the feds for Medicaid overpayments for school‐based therapy services. And it was brought under the qui tam provision of the false claims act, so the whistleblower is getting $10M. It all revolves around improper payments for speech therapy services in Medicaid. And ‐ get this ‐ if the case would have gone to trial, NY gov Paterson thinks it would have cost the state a $1B more than they are settling for. The audit leading up
It pays to blow the whistle – These are just 2 recent examples of individuals making out big under qui tam suits in Medicaid frauds. Its not uncommon for the whistleblower to receive millions upon millions for speaking up – sometime after years of legal battles and fees, however.
to the settlement found that a lot of the school‐based services did not meet federal payment requirements or may not have happened at all. 21 Whistleblower Makes Out in Another Case Endoscopic Technologies makes devices used to treat heart ailments (ablation devices)‐ and is accused of advising doctors on how to trick Medicare into paying more for them and for bribing doctors to use them in
surgeries. The suit was filed under the qui tam provisions(whistleblower) of the False Claims act. The suit was filed to the tune of $1.4M, with $210k going to the whistleblower. According to the report, there is a trend of similar cases for manufactures of this type of device in Texas. 22
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CHIP News Fall 2009 Tell all your friends DHHS Secretary Sebelius has started a new CHIP outreach program, complete with a
$100M budget to "reach people who are eligible but not yet enrolled in" CHIP programs nationwide. She kicked off the publicity tour for it in CO while praising Gov Ritter for his efforts to increase CHIP in CO. Ritter has lead CO CHIP expansion efforts that enrolled 67,000 more kids (an increase of nearly a third). In addition to Sebelius, outreach fund, the CHIP reauth signed back in early 2009 proposes
to cover as many as 4M more kids. 23 States increasing CHIP rolls The $33B from the CHIP reauth package has definitely been leveraged in some states, with 250,000 new eligible kids across the country. States participating in recent CHIP expansions ‐ WA just raised the FPL criteria to high 300%; AL tried to stop a CHIP extension to 14,000 kids that would cost $8M, but it was pushed through in the state legislature. The NYT lists other states as expanding eligibility criteria as well ‐ AR, IN, OK, OR, OH. 24 Even as Iowa faces a nearly $1B budget deficit, it is expanding its CHIP program to 12,380 more kids at a cost of $5.7M (that’s 460 per kid added). The state is targeting an even bigger expansion next year, trying to get most of the 27,000 kids in Iowa without insurance into the program. 25 Other states are tightening their belts though CA just put in an enrollment freeze for its CHIP program; AZ almost made CHIP eligibility more restrictive until the Republican governor stopped it; LA, NC, AK, DE, GA, MO, RI and TX all tried to expand their CHIP programs but either did not have the money or the votes. The CA CHIP enrollment freeze is in reaction to a $90M budget reduction from the legislature. There are some hopes in CA that tax money will come in to save the day once more. 26 The CA freeze is estimated to move 350,000 kids to a waiting list.
Hey‐ We know it’s tough out there.
Here’s a few Medicaid‐specific opportunities. Join our LinkedIn group for more contact info on job posters. Director of Contracting and Provider Relations ‐ MANAGED CARE‐ GA, MS, OH Currently engaged in search for a Director for a health plan in each of these geographic locations. Preference will be given to candidates with experience in the given market. Exceptional career opportunities with this GROWING organization!! Contact PamD@healthcareerprofessionals.com or 866‐ 371‐0687 X 256 Nationwide Health Insurance Jobs from ESS
These opportunities are with large, national Health Insurance organizations. Our services are free to you. Salaries shown are estimated. Most include relocation packages. Email me for more information, email@example.com Regional Director Large Community Care organization has a leadership opportunity based in Austin, TX. We are currently recruiting a Regional Director to assist in the management of several branch office locations in Texas. This position is responsible for financial goals, quality care, customer satisfaction and maintaining compliance to company policies and programs. To apply, send your resume and a detailed cover letter along with your salary requirements to firstname.lastname@example.org or fax to 512‐374‐0090
Build Engineer 1. Operate builds and deployment for Development and SIT environments; 2. Support Development and Test Code Streams management; 3. Support administration of Rational Products (Clearquest, Clearcase, ReqPro) ‐ Kimberly Kazee, Sr Recruiter at ACS MEDICAID ADMINISTRATIVE MANAGER Excellent opportunity with a well‐known world‐wide pharmaceutical company ‐ Marla Ripperton, Executive Recruiter at Summerfield Associates, Inc.
Medical Director , Indiana Health Plan The Medical Director is a key physician leader providing organizational leadership in the operational areas of utilization review, case management, and related policy and practice initiatives. He/she will serve as a lead physician on the medical management team working closely with the Executive Director and other management staff within Clinical Services. Molly Parsons Healthcare Executive Connections email@example.com PROGRAM MANAGER ‐ MEDICAL MANAGEMENT Seeking a Program Manager for a newly created permanent position leading a critical multi ‐ year project in the Medical Management area. Our client is a southwestern based, fast growing, aggressive, nationally recognized Health Insurer. We are looking for candidates who have a proven record of large‐ scale project leadership with a health plan or disease management company. contact firstname.lastname@example.org ASSOCIATE VICE PRESIDENT OF DISEASE AND CASE MANAGEMENT We are looking for candidates who have a proven record of strong leadership and management skills with a health plan or disease management company. Candidates should also have experience in providing managed care to special populations, Medicaid or Medicare recipients. contact email@example.com 1
"DELAWARE: Walgreens postpones cut‐off for patients on Medicaid." MIKE CHALMERS. The News Journal. 7/4/2009
"Florida Part of Multistate Settlement with Drug Companies over Vytorin." FL Attorney General. 7/15/2009
3 4 5
"Idaho recovers $660,000 in drug settlement.” Associated Press. 7/23/2009 "Judge blocks pay cut for in‐home caregivers." Kevin Yamamura." Sacramento Bee. 6/26/2009 "Medicaid providers in California win in legal challenge over program cuts." McKnights Long Term Care News.
CMS Releases Proposed Medicare Physician Fee Schedule Changes for 2010."Michael Apolskis. Medicare Update.
"La. Health department cuts Medicaid providers." MELINDA DESLATTE .Associated Press.8/3/209
"Hurricane Payments Stand To Affect Medicaid." the new 99.5 Fm.com. 7/20/2009
"New Lewin Report Shows Need For National Medicaid Out‐of‐Network Claims policy."Medical News Today.
"New Medicare Data Compare Hospitals Based On Readmissions." Medical News Today. 7/13/2009
"CMS Adds Readmissions Data to Hospital Compare Website." Medicare Update. Michael Apolsksis. 7/9/2009
"U.S. hospitals: 'Double failure'." Steve Sternberg and Jack Gillum.USA TODAY. 7/10/2009
"Texas Medicaid program likely to surge under health care proposals" DAVE MICHAELS.The Dallas Morning
"State Medicaid Coverage, Costs Grow In Maryland, Mississippi." Medical News Today.7/3/2009
"Medicaid and the States: Health‐Care Reform's Next Hurdle."Karen Tumulty. Time. 7/21/2009 "An Illustration of the Impact on Hospitals in California of a Government‐Run Health Plan that Pays Medicare
Fee‐for‐Service Rates" AHIP. 7/2009 17
"Federal Program Cracks Down On Medicare Fraud In Houston." Horswell. 7/12/2009
"Massive Medicare Fraud Case Highlights Miami's Increased Enforcement." Medical News Today. 6/25/2009
Massive Medicare fraud case: Feds charge 53 in $50M medical billing scheme." Paul Egan and Gordon
Trowbridge. The Detroit News. 6/25/2009 20
"Eight Miami‐Area Residents Charged In $22 Million Medicare Fraud Scheme Involving Home Health Care
Agencies." Medical News Today. 6/28/2009 21
"City and State Agree to Repay U.S. for Improper Medicaid Claims." NICHOLAS CONFESSORE. NYT. 7/21/2009.
"San Ramon firm settles FDA suit for $1.4 million, denies wrongdoing." Josh Richman. Oakland
"Federal health chief Sebelius praises Colorado insurance efforts. "Denver Business Journal ‐ by Bob
"Defying Slump, 13 States Insure More Children." Kevin Sack. NYT. 7/18/2009
"Culver: US health overhaul would maintain Iowa gains." Jason Clayworth. Desmoines Register. 7/15/2009
"Healthy Families Freezes Enrollment." Capitol Public Radio. Kelley Weiss, 7/17/2009
Published on Nov 2, 2009
Pharma Update - Page 3 Reimbursement News - Page 5 Quality News - Page 9 Enrollment Growth News - Page 10 Healthcare Reform - Page 11 Fraud...