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Mississippi Governor Haley Barbour

Mississippi lawmakers ended their summer-long special session with a whimper Aug. 4, failing to resolve the Medicaid funding impasse but allowing Gov. Haley Barbour to enact his latest plan to fund the program, which is set to run out of money in March 2009.

Barbour has proposed a plan that will increase the gross revenue assessment on hospitals to generate $88 million of the $90 million shortfall in funding for fiscal year 2009, which began July 1. The additional $2 million will come from moderate cuts of less than 1 percent on other provider services. Barbour said Medicaid can increase the assessment without legislative approval, although House Medicaid Committee Chairman Dirk Dedeaux, D-Perkinston, said there is a legal question as to whether Barbour can decrease payments to providers without legislative approval.

The Mississippi Hospital Association is waiting for details on the plan before issuing a statement, said Michael Bailey, vice president, finance and chief financial officer, when reached by telephone the day after the special session adjourned.

"Since we haven't seen the plan, there's really nothing we can say about it," Bailey said, adding that the MHA had filed a Freedom of Information request with the state on Aug. 1 for more information on the governor's plan.

During the impasse, Barbour had threatened a plan that would make $375 million in cuts to hospitals and nursing homes, but that plan was called off by Medicaid the last week of July.

About one in five Mississippians - mostly the elderly, disabled, children and poor - are served by Medicaid.

Barbour called the special session on May 21, but lawmakers had met only sporadically for a few days at a time throughout the summer. The sticking point was the determination by the House to raise the cigarette tax - at 18 cents a pack, one of the lowest in the nation - to fund Medicaid, and the governor's refusal to even consider raising the tax.

On the final day of the special session, the House tried to consider a new proposal to raise tobacco and hospital taxes, but failed to get enough votes to call the bill up for debate. Lt. Gov. Phil Bryant said he would not consider another Medicaid funding proposal, anyway. He wants to see if Barbour's new plan will work.

Under Barbour's plan, hospitals would be reimbursed with mostly federal money associated with Medicaid. The MHA's Bailey told the House Medicaid Committee that those reimbursements usually take up to a year, but Barbour said they will be made monthly.

In a related move, Barbour announced on July 22 that qualifying public hospitals would receive more than $88 million of federal reimbursement payments for uncompensated care costs. The Division of Medicaid notified the providers, and the hospitals received payments on July 24.

The hospitals participate in the federal disproportionate share program (DSH), which reimburses the hospitals with additional federal funds to help cover the costs of providing care for indigent or uninsured patients, or other uncompensated care, according to the governor's press release. They pay a provider fee known as an intergovernmental transfer (IGT) to maximize DSH payments.

"That's money we normally get anyway," said Bill Oliver, CEO of Forrest General Hospital in Hattiesburg, which is the second largest Medicaid provider in the state. "We used to get it quarterly and it's almost a year late."

The $88 million is only half of what the hospitals are due. The rest will be paid at a date to be determined by the Center for Medicare and Medicaid Services (CMS).

Last year, the payment was almost two years behind, Oliver said. Those tardy payments make it difficult to budget.

"That money has been sitting in Washington," Oliver said. "What I want is stability, even if it's going to be less. I think he did push some buttons to get the payment made this summer. In my mind, it was something that was communicated to the public to provide some good news. It did surprise me that it was publically announced."

Oliver said he is optimistic that Barbour and the Legislature can eventually come to an agreement on how to solve Medicaid's long-term funding woes. Lawmakers have said that the funding deficit will be even worse next year.
"There are plenty of options that they still could agree on," Oliver said. "The good news is, all parties want to fund this. They just can't agree on where the funds are going to come from. I know the governor's trying to come to a long-term solution and I believe the Legislature is, too."

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