Beshear proposes Medicaid money move; Williams says he's 'unimpressed'

01/19/2011 02:46 PM

FRANKFORT — Gov. Steve Beshear on Wednesday proposed shifting $166.5 million from the 2012 budget to fill in a financial hole in Medicaid this year.

The proposal won backing of House Democrats and medical providers, who said they are concerned that a failure to plug the Medicaid budget deficit will mean a cut of up to 30% in the state’s payments to doctors for working with Medicaid patients.

But Senate President David Williams, a Burkesville Republican and GOP candidate for governor, said he was “unimpressed.”

He said he wouldn’t support such a measure until he learns more about how well the administration has done in cutting $125 million from Medicaid through efficiencies as the General Assembly outlined. He also said moving money from one year to another is part of a tired “stop-gap” approach mindset that must change.

“The governor has no plans,” he repeatedly told reporters in his office in the Capitol Annex.

Beshear said moving the money allows it to be matched with more federal dollars this fiscal year. That matching rate is lowered next year.

Beshear said he’s confident that the state can save that same amount that will be moved — $166.5 million — during next year’s budget through new measures, such as allowing outside health care providers to manage delivery of the Medicaid program to the state’s poor and disabled Kentuckians.

The program has about 820,000 enrollees, which is about 19% of Kentucky’s population. Medicaid patients in Louisville and 15 surrounding counties are currently covered by the Passport Health Plan, a managed care provider.

Questions arose last fall about the efficiency of Passport after state Auditor Crit Luallen released a report detailing excessive spending on travel and lobbying and conflicts of interest. That also exposed shortcomings with the state’s oversight of the nearly $1 billion program.

Health Cabinet Secretary Janie Miller told cn|2 Politics Wednesday that the state is accepting requests for information from providers who are interested in setting up other managed care networks and hopes to send out formal requests for proposals in April.

Because the state’s Medicaid payments are matched by the federal government, a shift of $166.5 million in state funds means the total hole in 2012 will be $600 million worth of state and federal dollars. That represents 10% of the $6 billion program in Kentucky.

Miller and Beshear said they’re confident a move to more managed care systems and other efficiencies can slash that much in 2012.

But Williams said he had “no confidence” in the governor or the leadership of the health cabinet to do that based on the administration’s recent track record on Medicaid.

The strong rhetoric underscored how differences between Williams and Beshear may bleed from the governor’s race into this session of the General Assembly. Lawmakers return to Frankfort on Feb. 1.

Moving the money requires an amendment to the 2011-2012 budget, which would need 60 of the 100 votes in the House and 23 of the 38 votes in the Senate to approve.

The state must balance its budget each year. And leaders knew Medicaid would be a potential problem when Congress approved $100 million less in federal assistance for Kentucky’s Medicaid program in August than what lawmakers had been banking on.

Williams acknowledged that the $100 million is a problem and needs to be dealt with. He said “many options” exist but declined to say which ones he prefers until he sees more information from Beshear and the health cabinet.

Beshear said the other two options besides moving the money up from 2012 would be to cut $600 million worth of health benefits out of the program by July 1 or to cut reimbursements to the providers and doctors by 30%.

“Neither of those options is palatable and neither, to me, are acceptable,” Beshear said.

Mark Neff, CEO of Saint Claire Regional Medical Center in Morehead, said providers “support the funding transfer” to avoid deep cuts to doctors and hospitals.

“Those cuts would potentially result in significant job actions,” Neff said.

- Ryan Alessi


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