ROBYN JACKSON

If it seems that the governor and state legislature are in no rush to solve the Medicaid funding crisis, with their on-again, off-again special session, you’re right.

“There is no sense of urgency,” Dirk Dedeaux, D-Perkinston, chairman of the House Medicaid committee, said in a telephone interview a couple of days after round two of the special session adjourned in mid-July. “The Division of Medicaid has run a deficit for four of the five years (Gov. Haley Barbour) has been in office. The state has $388 million sitting in an account not doing anything. Some call it the ‘rainy day’ fund. When we come back in January, it would be very easy to appropriate the money to finish out the year.”

The House and Senate are due back in Jackson on Aug. 4 for round three of the special session. The regular session ended April 18 and legislators met briefly in June before recessing in a stalemate.

At issue is a $90 million shortfall in Medicaid funding for fiscal year 2009, which began July 1. The shortfall resulted from a change in the way the federal government reimburses the state for Medicaid services. For every dollar Mississippi spends on Medicaid, the federal government spends more than three dollars. Almost 600,000 Mississippians, mostly the poor, children and disabled, are served by Medicaid.

The House wants to raise the cigarette tax, which at 18 cents a pack is one of the lowest in the U.S., and pair it with a hospital tax Barbour favors, while Barbour, a former tobacco company lobbyist, refuses to consider raising the cigarette tax, although he has repeatedly denied that he is protecting the cigarette makers.

“We think it’s better to tax something that causes healthcare problems,” Dedeaux said. “We’ve gotten down to this philosophical divide in this process.”

The situation is becoming critical. On July 11, Barbour filed paperwork that would make cuts to Medicaid healthcare providers, including hospitals, nursing homes and physicians. Barbour said the cuts will go into effect Aug. 6 unless lawmakers adopt the hospital tax plan, which he considers a long-term funding solution for the Medicaid program.

“The need for these cuts is an unfortunate result of the House leadership’s unwillingness to consider a fair, permanent, sustainable solution to Medicaid funding,” Barbour, a Republican, said in a statement.

“He ought to be to the bottom-of-his-cold heart ashamed,” House Health and Human Services Committee Chairman Steve Holland, D-Plantersville, told the Clarion-Ledger newspaper.

House Democrats say Medicaid has almost $600 million in its coffers and the cuts are unnecessary, according to the Clarion-Ledger story.

Barbour, in a news conference on July 10, told patients, physicians, pharmacists, nursing home operators and others who could lose Medicaid coverage or money that they should contact their Legislators to complain.

“Tell them to talk to their House members and get their House members to quit holding the doctors and the nursing homes hostage to the House members’ political agenda,” Barbour said. “That’s what I would have my doctor do.”

Sam Cameron, president of the Mississippi Hospital Association, told television reporters that it’s the poor, sick patients who are being hurt the most in this political battle.

Bill Oliver, CEO and president of Forrest General Hospital in Hattiesburg, said FGH could be forced to cut 300 jobs if long-term solutions to Medicaid funding are not found. Forrest General is the second-largest provider of Medicaid services in the state, behind University Medical Center in Jackson, and Medicaid is the hospital’s second-highest payer. More than 25 percent of the patients at Forrest General are uninsured. Oliver said neonatal, labor and delivery, behaviorial and home care units would be limited under the cuts. The impact to the hospital could be $16.1 million.

Michael Bailey, vice president, finance and chief financial officer of the Mississippi Hospital Association, said in a telephone interview that MHA officials hope that the governor will allow the House and Senate to consider the cigarette tax hike. The governor controls the agenda of the special session.

“We hope the governor will expand the call to allow them to consider all options,” he said. “Historically, the legislature has always taken care of Medicaid. We’ve got the highest confidence in them.”

Complicating things is a Hinds County chancery court’s ruling on July 10 that Barbour cannot bypass the Legislature to increase hospital taxes to pay for Medicaid.

Barbour’s plan would be “an unconstitutional infringement of the legislative function of controlling the purse strings,” Judge William Singletary wrote in the nine-page decision. Only the Legislature has the power to set taxes or fees that hospitals must pay to the Division of Medicaid.

Dozens of hospitals filed a lawsuit two years ago challenging a tax that Medicaid tried to make them pay in 2006. Barbour has not said if he will appeal Singletary’s ruling, but if he did appeal and win, the Division of Medicaid would be able to set taxes hospitals must pay to support the program. Barbour’s current tax plan is different from the one that prompted the lawsuit.
The $90 million shortfall is just part of an overall lack of funding. Barbour said a $90 million shortfall in state money actually translates to a total annual loss of $375 million.

“The Medicaid problem is much bigger than $90 million,” Dedeaux said. “If the governor continues to reject the compromise we have offered, and adamantly proposes taxing hospital providers, I think it’s very likely we won’t come to a solution in this special session.”



August 2008