Local health-care providers are bracing for the possibility of a shortfall in this year’s Medicaid budget and watching with interest as elected officials take different approaches to fixing the expensive program in the future.
After the regular legislative session ended Wednesday without solution to a $166.5 million shortfall in the program that funds health care for low-income Kentucky residents, Gov. Steve Beshear warned of a 30-percent decrease in reimbursements to health-care providers.
Some of those involved with local health care say that would make an already bad situation even worse.
“We already provide a significant amount of uncompensated care,” said Vicki Darnell, chief executive officer for Ephraim McDowell Health. “This would mean providing even more of that uncompensated care, and the insurance is just not going to make up for that. There would be consequences for the community, the hospital, the physicians and the emergency department.”
McDowell Chief Financial Officer Bill Snapp said the government only reimburses 70-75 percent for Medicaid payments already, meaning a 30-percent cut would drop that to only about half of the actual cost of the provided care. With about 13.5 percent of McDowell’s charges Medicaid-related, that would mean a sizable amount of money.
“I think this would invite even more litigation than is already pending,” Snapp said. “I can’t imagine that the state would go through with it.”
When Republicans abruptly ended the regular session Wednesday, Gov. Beshear immediately called a special session for next week.
Beshear, along with Democrats in the House of Representatives, are proposing that the money to fill the gap for this year be taken from next year's Medicaid budget.
Republicans in the Senate, including David Williams, the Senate president and Beshear’s possible gubernatorial opponent, have proposed broad, 1.58-percent budget cuts to all government programs in order to make up the difference.
Sen. Tom Buford, R-Nicholasville, who sits on the Medicaid Oversight and Advisory Committee, said it will be difficult to get something done in the legislative session without more willingness to compromise on budget cuts.
Buford said he understands the reluctance to cut funding, especially for education, and favors a plan that would only pull forward $100-110 million from next year’s allotment without reducing money for schools.
Rep. Mike Harmon, R-Danville, himself a candidate for lieutenant governor running against Williams’ ticket in the primary, said he was disturbed by Williams’ actions in convening the legislature Wednesday so the 30-day session could be “gaveled” closed without fixing the budget.
“In the greater picture, I think David Williams’ actions really set an extremely dangerous precedent where the people’s power has been ceded to the governor because we’ve foregone that end of the session where the legislature can override whatever he may decide to veto,” Harmon said.
Like Buford, Harmon would be in favor of using fewer funds from next year to address the shortfall. He said he doesn’t want to reduce the primary state funding formula for education, but there could be some room for cuts at the administrative level.
Part of Beshear’s proposal would include contracting with private managed-care organizations, which are intended to lower medical costs through prevention, reducing emergency room visits and other methods. Beshear has said it could save as much as $425 million, but Senate Republicans have balked at the claim.
Buford pointed to the fact that state audits could not determine whether Passport, a managed-care group used in and around Jefferson County, had actually saved any money.
"While there can be savings from managed care, they are limited, and only so much can probably be achieved,” Buford said.
Darnell has had experience with managed care when she worked in South Carolina.
“I’m not saying it can’t or won’t work, but the savings they thought they would see there were not realized,” Darnell said.
The Associated Press contributed to this article.