Senate Approves Medicaid Fix, Greg Stumbo Rejects It So "Special" Session D-R-A-G-S On!
Senate approves budget plan with cuts; Stumbo rejects it
By Beth Musgrave and Jack Brammer
FRANKFORT — House Speaker Greg Stumbo said Thursday that the Senate's plan to fix the Medicaid budget with $101 million in cuts across state government is unacceptable and probably means the issue will not be resolved in the special legislative session.
"It's obvious the majority of the Senate doesn't want to solve this problem," Stumbo said, adding that he expects Gov. Steve Beshear will have to reduce reimbursement rates for health care providers by 35 percent on April 1 to address the Medicaid budget.
The full Senate voted 22-15 on Thursday to pass its version of House Bill 1. All of the Senate Democrats voted against the measure.
The plan would rely on some savings in the state Medicaid program but would also require cuts of about 0.355 percent in the remaining months of the current fiscal year, which ends June 30th. Most parts of state government would be cut 1.74 percent in the second year of the state's two-year budget.
If Beshear can show this fall that he achieved more than $114 million in savings in Medicaid through managed care plans and a series of cost-saving initiatives, the budget plan calls for the legislature to reverse spending cuts to K-12 education and higher education. However, the legislature would have to vote in January to reverse the education cuts.
Without a later reversal by lawmakers, higher education spending would would be cut 1.74 percent next fiscal year and the main funding formula for schools would be trimmed 0.812 percent. The total cut to K-12 and postsecondary education would be approximately $46 million.
Savings in the Medicaid program would have to be certified by an independent accounting firm, according to the Senate's plan. The accounting firm's fees would be paid by Beshear's administration, not the legislature. It's not clear how much such an audit would cost.
The Senate budget fix also would prevent Beshear from furloughing state employees and would limit Beshear's ability to restructure debt.
On top of the $81 million in cuts to most agencies already required next year, the Beshear administration would have to produce $169 million in additional cuts or unspecified savings. Those two provisions were part of the original two-year spending plan the legislature approved last summer but Beshear vetoed.
During debate on the Senate floor, Republicans said the Senate plan was more fiscally responsible than a House budget plan passed earlier in the week.
Sen. Julie Denton, R-Louisville, said the state transferred money out of the Medicaid fund in 2009 to shore up other parts of government. It seems logical that "taking a small cut across all of state government" to balance Medicaid's books is not too much to ask.
Denton said she was not convinced after hearing more than six hours of testimony Wednesday that the Cabinet for Health and Family Services can generate savings in the Medicaid program. The Senate plan allows the Beshear administration "to put their money where their mouth is," Denton said.
If they can generate savings in Medicaid, "education is held harmless," she said.
The plan also calls for legislators to forgo pay during any time Beshear uses to consider vetoing the budget bill. Typically, legislators are paid during the veto period even though they are not in Frankfort.
It is likely that leaders of the House and Senate will go into a budget conference committee to try to find middle ground. It's not clear if budget negotiations will begin Thursday afternoon.
Stumbo, D-Prestonsburg, said the Senate "took a 14-page bill and a very good solution and turned it into a 100-some-page bill and a very bad solution."
Stumbo said House Democratic leaders met with House Republican leaders, "and everyone agreed that it's just the same-old rhetoric."
Cuts are unnecessary, Stumbo said.
"There is yet to be any proof in the record that says the governor can't sustain what he says he can do and make these savings ... We're back to square one," he said.
It's not clear when the special legislative session, which began March 14 at a daily cost of about $63,500 to taxpayers, will end. Beshear called the special legislative session after the regular legislative session ended March 9 with no agreement on a fix to the Medicaid budget.
Stumbo said he holds no hope that the conference committee will be productive.
"I can guarantee you this," Stumbo said. "It will not end up causing education to be cut until it is absolutely necessary. We are not going to take that child's lunch money before we try everything else."
Beshear, a Democrat, was not immediately available for comment about the Senate plan.
The House approved its version of House Bill 1 on Monday. The House bill would give Beshear until Aug. 15 to certify whether a series of managed care programs would save money in Medicaid. If Beshear can not certify savings, then there would be cuts across most of state government beginning Oct. 1. Education would be mostly exempt from the cuts.
A lot is at stake if the two sides can not come to an agreement on a budget before April 1. Beshear has said because of federal rules regarding the Medicaid program, his only option to shore up a shortfall in the budget is to cut payments to Medicaid providers by 35 percent.
Health care providers have warned that they may have to close, layoff employees and possibly reject Medicaid patients if those cuts are necessary.
The state could also lose money. Included in both the House and Senate budget is a provision that moves $18.9 million in higher education funds from next fiscal year to the current fiscal year. That money is needed to secure $134 million in federal stimulus dollars. If the state does not meet its requirements for matching funds, there is concern that the federal government may try to take back its money.
The state also could lose more than $12 million in federal matching money in Medicaid. The federal government currently pays about 80 percent of the costs of that program. But that higher federal match rate will be reduced beginning June 30th. Beshear had asked state legislators to move additional dollars from next year to the current year to capture an additional $12 million in federal money.
Read more: http://www.kentucky.com/2011/03/24/1683155/stumbo-rejects-senate-budget-plan.html#ixzz1HYRKdoOw
By Beth Musgrave and Jack Brammer
FRANKFORT — House Speaker Greg Stumbo said Thursday that the Senate's plan to fix the Medicaid budget with $101 million in cuts across state government is unacceptable and probably means the issue will not be resolved in the special legislative session.
"It's obvious the majority of the Senate doesn't want to solve this problem," Stumbo said, adding that he expects Gov. Steve Beshear will have to reduce reimbursement rates for health care providers by 35 percent on April 1 to address the Medicaid budget.
The full Senate voted 22-15 on Thursday to pass its version of House Bill 1. All of the Senate Democrats voted against the measure.
The plan would rely on some savings in the state Medicaid program but would also require cuts of about 0.355 percent in the remaining months of the current fiscal year, which ends June 30th. Most parts of state government would be cut 1.74 percent in the second year of the state's two-year budget.
If Beshear can show this fall that he achieved more than $114 million in savings in Medicaid through managed care plans and a series of cost-saving initiatives, the budget plan calls for the legislature to reverse spending cuts to K-12 education and higher education. However, the legislature would have to vote in January to reverse the education cuts.
Without a later reversal by lawmakers, higher education spending would would be cut 1.74 percent next fiscal year and the main funding formula for schools would be trimmed 0.812 percent. The total cut to K-12 and postsecondary education would be approximately $46 million.
Savings in the Medicaid program would have to be certified by an independent accounting firm, according to the Senate's plan. The accounting firm's fees would be paid by Beshear's administration, not the legislature. It's not clear how much such an audit would cost.
The Senate budget fix also would prevent Beshear from furloughing state employees and would limit Beshear's ability to restructure debt.
On top of the $81 million in cuts to most agencies already required next year, the Beshear administration would have to produce $169 million in additional cuts or unspecified savings. Those two provisions were part of the original two-year spending plan the legislature approved last summer but Beshear vetoed.
During debate on the Senate floor, Republicans said the Senate plan was more fiscally responsible than a House budget plan passed earlier in the week.
Sen. Julie Denton, R-Louisville, said the state transferred money out of the Medicaid fund in 2009 to shore up other parts of government. It seems logical that "taking a small cut across all of state government" to balance Medicaid's books is not too much to ask.
Denton said she was not convinced after hearing more than six hours of testimony Wednesday that the Cabinet for Health and Family Services can generate savings in the Medicaid program. The Senate plan allows the Beshear administration "to put their money where their mouth is," Denton said.
If they can generate savings in Medicaid, "education is held harmless," she said.
The plan also calls for legislators to forgo pay during any time Beshear uses to consider vetoing the budget bill. Typically, legislators are paid during the veto period even though they are not in Frankfort.
It is likely that leaders of the House and Senate will go into a budget conference committee to try to find middle ground. It's not clear if budget negotiations will begin Thursday afternoon.
Stumbo, D-Prestonsburg, said the Senate "took a 14-page bill and a very good solution and turned it into a 100-some-page bill and a very bad solution."
Stumbo said House Democratic leaders met with House Republican leaders, "and everyone agreed that it's just the same-old rhetoric."
Cuts are unnecessary, Stumbo said.
"There is yet to be any proof in the record that says the governor can't sustain what he says he can do and make these savings ... We're back to square one," he said.
It's not clear when the special legislative session, which began March 14 at a daily cost of about $63,500 to taxpayers, will end. Beshear called the special legislative session after the regular legislative session ended March 9 with no agreement on a fix to the Medicaid budget.
Stumbo said he holds no hope that the conference committee will be productive.
"I can guarantee you this," Stumbo said. "It will not end up causing education to be cut until it is absolutely necessary. We are not going to take that child's lunch money before we try everything else."
Beshear, a Democrat, was not immediately available for comment about the Senate plan.
The House approved its version of House Bill 1 on Monday. The House bill would give Beshear until Aug. 15 to certify whether a series of managed care programs would save money in Medicaid. If Beshear can not certify savings, then there would be cuts across most of state government beginning Oct. 1. Education would be mostly exempt from the cuts.
A lot is at stake if the two sides can not come to an agreement on a budget before April 1. Beshear has said because of federal rules regarding the Medicaid program, his only option to shore up a shortfall in the budget is to cut payments to Medicaid providers by 35 percent.
Health care providers have warned that they may have to close, layoff employees and possibly reject Medicaid patients if those cuts are necessary.
The state could also lose money. Included in both the House and Senate budget is a provision that moves $18.9 million in higher education funds from next fiscal year to the current fiscal year. That money is needed to secure $134 million in federal stimulus dollars. If the state does not meet its requirements for matching funds, there is concern that the federal government may try to take back its money.
The state also could lose more than $12 million in federal matching money in Medicaid. The federal government currently pays about 80 percent of the costs of that program. But that higher federal match rate will be reduced beginning June 30th. Beshear had asked state legislators to move additional dollars from next year to the current year to capture an additional $12 million in federal money.
Read more: http://www.kentucky.com/2011/03/24/1683155/stumbo-rejects-senate-budget-plan.html#ixzz1HYRKdoOw
Labels: Kentucky politics
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