Tax amount cited for Barbour's change in no-cut stance

JACKSON – Robert Robinson, Gov. Haley Barbour’s head of the Division of Medicaid, signed an agreement in May 2008 with the Mississippi Hospital Association promising not to cut hospitals’ Medicaid payments if they would pay an additional $90 million in taxes.
That agreement fell through when Barbour could not get his hospital tax proposal through the Mississippi House during a special session last summer.
This week Barbour has refused to call a special session for the Legislature to vote on a budget compromise because the agreement, worked out by House and Senate leaders, also has language preventing Barbour from cutting hospitals’ Medicaid payments in exchange for a $60 million tax increase.
Many, if not most, state services will shut down if a budget is not passed by the Legislature and signed into law by the governor before the new fiscal year begins Wednesday.
But Barbour is refusing to call a special session for the Legislature to vote on a House-Senate budget agreement because he is opposed to the no-cut provision for hospitals.
When asked why the Division of Medicaid would agree to a no-cut provision in May 2008 for hospitals, but not now, Barbour spokesman Dan Turner said, “The primary difference is… the hospitals were talking about paying $90 million then, compared to $60 million now.
“When you take one-third of the money out of the equation, it increases the chances of there being a deficit and the agreement would take away the governor’s tools to repair that deficit.”
Sen. Hob Bryan, D-Amory, the key Senate negotiator, said that when Robinson signed the agreement in 2008, Mississippi paid 24 cents of every Medicaid dollar spent in the state while the federal government paid the rest.
Now, thanks to the federal stimulus package passed earlier this year by Congress, the state is paying only 16 cents of every Medicaid dollar spent.
The change in the reimbursement rates means hundreds of million in additional federal funds for the state Medicaid program.
If the reimbursement rate returns to 24 cents, under the agreement worked out by House and Senate leaders and opposed by Barbour, the hospital tax would increase to $90 million annually.
“What we have come up with moves dramatically toward the governor’s position,” Bryan said. “One wonders how he can keep from going out and declaring victory.”
But far from declaring victory, Barbour says he will fight the proposal with “all my might” because it prevents him from being able to make cuts to hospitals if there is a deficit in Medicaid.
Without the ability to cut, he said, Medicaid spending could spiral out of control.
Rep. Cecil Brown, D-Jackson, said he would take the governor at his word that he is opposed to the no-cut provision now and was not in 2008 because of the $30 million difference in the tax.
But, he added, “he said he wanted a $90 million tax, and we have one that can be as much as $90 million… I really don’t understand what the governor wants.”
Also on Wednesday, Sam Cameron, executive director of the Mississippi Hospital Association, said that because of the current impasse some hospitals are informing Medicaid recipients that they will be reclassified as private-pay patients.
“No patient will be denied care or treatment by any hospital, but without the existence of the Medicaid program, beneficiaries will be considered ‘private pay’ patients responsible for the whole cost of their treatment and care,” he said in a prepared statement.
“Loss of coverage will not be limited to just hospital services but will include all Medicaid services, ranging from nursing home care to physician visits, from prescription drugs to dialysis centers, from home health services to special needs children, from nurse mid wives to psychiatric treatment facilities.”
Plus, Cameron said some hospitals are notifying their vendors that their contracts to provide services to the hospitals will be canceled at the end of the fiscal year on Tuesday and will not be resumed until Medicaid is funded.
“These delays impact the health and viability of thousands of small businesses across the state,” he said.
Barbour has maintained that he believes a budget will be passed before Wednesday but if not, “critical services” will not be interrupted.

Bobby Harrison/NEMS Daily Journal