To avoid deadlock, House agrees to Senate's Medicaid plan to allow governor to veto cut provisions

03/24/2011 06:39 PM

(UPDATED 7:35 p.m.) FRANKFORT — With another legislative stalemate likely and cuts to doctors looming, the House agreed to the Senate’s Medicaid budget fix proposal on Thursday to allow Gov. Steve Beshear the chance to veto provisions.

Specifically, Beshear and the House Democrats have objected to the Senate’s provisions that call for cuts to education in 2012 and programs for veterans.

The sudden turn of events Thursday night came after it appeared the House and Senate would again deadlock over how to solve a more than $100 million shortfall in the Medicaid program, which covers health costs for more than 800,000 poor and disabled Kentuckians.

A stalemate could have led to 35 percent cuts to doctors and providers of health care to those Medicaid recipients if the shortfall wasn’t dealt with by April 1.

The Republican-controlled Senate voted 22-15 along party lines Thursday to include cuts to education in a bill that would fill a shortfall in this year’s Medicaid budget.

Democratic House Speaker Greg Stumbo told reporters before the Senate passed the bill out of their chamber that he didn’t see how the two sides would be able to rectify the differences.

The heart of the disagreement is over proposed cuts to education in the Senate’s plan.

In that plan, SEEK funding would be cut .812 percent in fiscal year 2012, a $23.5 million cut. And the public colleges and universities would be cut 1.74 percent, or $23 million.

But Stumbo and House Republican Leader Jeff Hoover — along with Gov. Steve Beshear — have said education cuts were a deal breaker.

Senate leaders stressed that cuts are necessary. They said in floor speeches and during committee meetings this week that they don’t trust Beshear’s administration to come up with the $169 million in savings called for in the House version of the bill.

Officials in Beshear’s administration have said they can make up the money through managed care and other means in 2012.

That was another point of disagreement between the two chambers, with the House and Senate Democrats opting to let the governor have his chance at savings first, then enacting cuts by Oct. 1. But the Senate wants cuts immediately for both fiscal years.

And Senate Majority Floor Leader Robert Stivers said if cuts are established now to balance the Medicaid budget, then even worse cuts will have to be implemented in the next budget. The Senate’s plan includes $101 million in cuts.

The Senate’s plan tries to recover money from extra debt restructuring that Beshear did above what the legislature had originally approved, factoring in more costs than the House acknowledges.

The Senate’s plan also:

  • calls for ending furloughs immediately upon the signing of the bill.
  • directs the Legislative Research Commission to contract with an outside accounting firm to help certify any managed care savings from Medicaid.
  • eliminates special session pay for lawmakers during any “veto period,” but the president of the Senate or speaker of the House could allow pay for any individual members during that time if they so choose.

Stumbo said he wasn’t optimistic that any conference committee would be productive.

- Kenny Colston

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