Ky. Senate Budget Panel Still Working on Medicaid (KY)

March 30, 2011

FRANKFORT, Ky.–A week and a half into a special legislative session, lawmakers remained divided Wednesday on how to shore up financing within the Kentucky’s Medicaid program.

Senate Appropriations and Revenue Committee Chairman Bob Leeper said questions linger on whether Gov. Steve Beshear’s administration can find ways to save $425 million in the Medicaid program next year, a key provision of a proposal approved by the House earlier this week.

Beshear contends the savings can be achieved in large part by privatizing portions of the program that provides medical care to more than 800,000 elderly, poor and disabled Kentuckians.

Leeper, an independent from Paducah and one of the leading skeptics, contends that the Medicaid could be thrown farther out of balance next year if the Beshear administration falls short in the savings, perhaps requiring a major adjustment to the state’s two-year budget.

The Senate budget committee spent some four hours Wednesday quizzing Health and Family Services Secretary Janie Miller on the proposal to save Medicaid money by contracting with managed-care organizations to provide selected services. Miller assured lawmakers that the savings could be achieved through managed care and o ther initiatives within the program.

Leeper’s goal had been to present a modified bill to the budget committee Wednesday for a vote, but he said that seemed less likely as the hours waned on.

"This is taking a little longer than we anticipated," Leeper said. "We want to make sure the members of the committee are briefed on whatever we do. We’re not going to drop it in front of them and ask them to vote on it. … If that takes longer than today, that’s important. We’ll take that time."

Beshear and House leaders have been pushing to transfer funding from next year’s budget to shore up Medicaid this year, then balance next year’s budget through privatization. The Senate wants across-the-board cuts to all agencies to free up money for Medicaid.

In an attempt to resolve the impasse, the latest House proposal calls for triggered cuts that would kick in only if the privatization doesn’t work. If lawmakers can reach accord by the end of the month, they could head off 35 percent cuts in reimbursement rates to doctors and other Medicaid providers.

Under the House plan, cuts would be mandated on Oct. 1 if Beshear is unable to save enough money. Public schools and higher education would be among the government programs that would be exempted from the potential cuts.