ROBYN JACKSON

Mississippi taxpayers will be footing the bill soon for a special legislative session to address the Medicaid funding crisis. Gov. Haley Barbour is expected to call the House and Senate back to Jackson in June to come up with a plan to fund the state’s Medicaid program, which faces a $90 million shortfall for fiscal year 2009, which begins July 1. Between 20 and 25 percent of the state’s population, or about 576,000 Mississippians, receive Medicaid. Many of the recipients are children and the elderly.

Barbour has not announced when he will call the legislators back to Jackson, but he said on April 18, when the regular session ended, that it would be before June 30. It costs about $60,000 the first day for a special session, and about $40,000 each day thereafter.

“That is all money we could be putting into the Medicaid program,” said Sen. Joey Fillingane, R-Sumrall. “Everyone wishes we could have fixed the problem during the regular session.”

At issue is how to fund the Medicaid program. The House wants to raise cigarette taxes to provide funds, while the governor and Senate want to tax hospitals to pay for it.

“We keep hearing from the governor’s office that the hospitals need to pay their fair share,” said Sam W. Cameron, president/CEO of the Mississippi Hospital Association (MHA), in a prepared statement. “We are emphasizing that it’s time for the state and tobacco companies to pay their fair share, too. If a tax is acceptable for hospitals in your eyes, then a tax should be equally acceptable for tobacco (or any other source) to provide funds for our state’s Medicaid program.”

The MHA called on Barbour to present all options, including a cigarette tax increase, during the special session.

Barbour has gone on record many times in the past couple of years saying that he is opposed to raising taxes. In 2006, Barbour, a Republican and former tobacco lobbyist, vetoed a bill passed by the legislature that would have raised the tax on a pack of cigarettes to $1 and would have reduced the sales tax on groceries by half from its current rate of 7 percent.

Mississippi has one of the lowest tobacco taxes in the nation, at 18 cents a pack.

Dirk Dedeaux, D-Perkinston, chairman of the House Medicaid committee, said the shortfall was created after the federal government changed its Medicaid funding policy in 2005.

“After Hurricane Katrina, the state was given hurricane (relief) money for Medicaid,” Dedeaux said. “Last year, we used the last of that money. We’ve got to find a different way to fund Medicaid.”

In February, the House passed a bill that would have hiked the cigarette tax to $1 a pack, but the bill died in the Senate Public Health and Welfare committee chaired by Sen. Hob Bryan, D-Amory.

In April, a Senate committee approved a bill that would place a bed tax on hospitals to fund Medicaid. The bill was devised by a consultant hired by the Mississippi Hospital Association, but soon after the bill was introduced, the MHA pulled its support, saying that changes made to the bill by committee members had removed protection for hospitals. If the bill had been signed into law in its original form, MHA would have had veto power over some changes to the state Medicaid plan.

Bryan told the Clarion-Ledger newspaper that it has been difficult to work out a compromise because there is “friction” between the governor’s office and the MHA. Bryan said the hospitals want to make sure the fee collection and reimbursements are handled “in a proper fashion.”

Barbour, however, has said he will not sign away any control over how the program operates.

Ron Seal, chief operating officer of Wesley Medical Center in Hattiesburg, said it makes sense to raise the cigarette tax because smoking contributes to many of the health problems of patients.

“We’re not in favor of a hospital tax,” Seal said. “As a provider, we’re not receiving (compensation from Medicaid) anywhere close to our expense. It’s just hard for us to understand why you’d want to tax hospitals.”

Based on Medicaid’s own estimates, Mississippi hospitals are paid approximately 13 percent less than their allowable costs to treat Medicaid patients, according to the MHA’s statement.

“Fifty of our state’s hospitals (43 percent) currently operate at a zero or negative profit margin,” the statement said. “Based on 2006 cost report data, Mississippi hospitals provided over $631 million in uncompensated care – of that total number, public hospitals provided 50.68 percent of the uncompensated care and private hospitals provided 49.32 percent (fueled by an uninsured problem further flamed by Medicaid roll reductions).”

The Stennis Institute recently estimated that a $1 cigarette tax increase would generate $175 million for the program annually. Medicaid spends $264 million per year on tobacco-related illnesses, according to the MHA.

During the last week of the regular session, it looked as if a Medicaid funding plan would be approved. On Monday, which was the deadline for approving spending bills, House and Senate leaders had agreed on a budget bill that would have put millions from the state’s general fund toward Medicaid for fiscal year 2009.

The bill also would have eliminated the face-to-face interviews that have been required since 2005 for Medicaid recipients to reenroll. Medicaid officials would have been able to use face-to-face interviews at their discretion if paperwork that had been mailed in was suspect. But Lt. Gov. Phil Bryant, a Republican, killed the bill before midnight, and neither side budged on Tuesday.

The Division of Medicaid started requiring in-person interviews as a way to weed out fraud. Barbour and many Republican lawmakers supported the move, but Democrats say the interviews place an undue burden on the recipients, many of whom are poor, elderly or disabled.

Fillingane said the outcome of the upcoming special session will be skewed to what the governor wants.

“The governor doesn’t want us to look at tobacco taxes,” Fillingane said. “You’re basically left with whatever code sections he presents. When you go into special session, you’re not going to have those options before you.”

Fillingane predicts that the Democrats will eventually go along with what Barbour wants.

“They can’t not fund Medicaid,” Fillingane said. “There will be some tough choices that have to be made.”



June 2008