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Friday, March 25, 2011

KY Legislature Passes Medicaid Funding; Beshear Promises Vetos

The Kentucky House approved a Senate version of a bill to resolve the state's Medicaid budget shortfall — part of a strategy to get the bill to Gov. Steve Beshear so he can veto provisions he and the House deem unacceptable.  The move would allow Beshear to delete cuts to education funding and other changes made by the Senate, leaving only the language from his original proposal that shifts state money into this year's Medicaid budget.

The House vote was 86-2. The “no” votes were cast by Reps. Dennis Keene, D-Wilder, and Adam Koenig, R-Erlanger.  After the vote, House Bill 1 was returned to the Senate, where President David Williams, R-Burkesville, signed it and sent it to Beshear.  The Senate then adjourned until April 6, when lawmakers will return to consider Beshear’s vetoes.  If the House, as expected, votes to sustain them, the vetoes will stand.
Beshear sent a letter of support to House leaders that Majority Leader Rocky Adkins, D-Sandy Hook, read aloud on the House floor before the vote.  “You have my absolute commitment to honor the principles you and the Senate Democrats have stood for throughout this session,” Beshear's letter said.
The Senate has contended that Beshear can’t achieve the efficiencies he promises to balance the Medicaid budget. It proposes instead to make cuts across state government, including education, to compensate for the shortfall. 
On Thursday night House Speaker Greg Stumbo, D-Prestonsburg, stepped down from the speaker's platform to make a rare speech from the House floor in which he assured members that Beshear had promised him that he would veto the Senate's spending cuts to state programs.  By voting for the Senate's version of the bill, Stumbo told members, “You're voting to protect education.”  He said the unusual maneuver was necessary because lawmakers must pass a bill that balances Medicaid before April 1 to avoid what Beshear has said would be 35 percent cuts in rates paid to Medicaid providers. Such a move, Stumbo said, would damage rural health care providers.
House Republican Leader Jeff Hoover of Jamestown urged House members to vote for the bill, saying that small health care providers will be spared devastating cuts on April 1 and education funding won't be cut. However, Hoover said he opposed adjourning the House Thursday night.  But Rep. Stan Lee, R-Lexington, told members, “If we're voting for something, let's mean it. ... Let's not do it as a sham.”
Earlier in the day the Senate passed a version that Stumbo had deemed “unacceptable” because of provisions that include the education cuts.  House leaders said the current special legislative session — costing about $64,000 a day — can end as soon as Williams signs HB 1 and sends it to Beshear.  The Senate vote for its version of HB 1 was 22-15, with all Democrats voting against it. All Republicans except Sen. Carroll Gibson of Leitchfield, who did not vote, supported the plan.
The revised Senate proposal would allow the legislature to restore the funding cuts to education if money becomes available next year.  The Senate acted after its budget committee, earlier in the day, approved the new version of HB 1 by a vote of 13-5, with the five no votes coming from Democrats.  The Senate plan makes funding cuts of 0.355 percent in the current fiscal year for nearly all state programs, other than base public school funding and postsecondary education. And it makes cuts of 1.74 percent in the 2011-12 fiscal year, beginning July 1, to all areas other than public schools, which would be cut by 0.812 percent.
In dollar terms, the bill would cut base public school funding by $23.5 million and postsecondary education by $23 million in 2011-12. The cuts to all of state government would be about $101 million.
However, the bill says the cuts in the next fiscal year to schools and postsecondary education will be delayed until Jan. 30, 2012.  That would allow the 2012 General Assembly to rescind them if the Beshear administration can establish that it has achieved its target for savings through a new “managed care” approach to delivering Medicaid services.
The Senate bill assumes that Beshear will be able to achieve half of the $139 million in savings he has promised during the 2011-12 fiscal year to Medicaid, the federal-state health care program for the poor and disabled that serves about 820,000 Kentuckians.  If an independent accounting firm, to be contracted with by the legislature, reports by next Jan. 2 that Beshear has saved more than that, the bill says “it is the intent of the General Assembly” to use that money to rescind any cuts to education.
Another key provision in the new Senate plan is that it would ban any more unpaid furlough days for state employees as of the date the bill becomes law. 
Williams, like Beshear a candidate for governor this year, said again that he doesn't believe the administration can achieve the Medicaid savings it has pledged next year through managed care.
“The crazy aunt in the attic here in Frankfort is that everyone knows the governor cannot accomplish these cuts to the level he says he's going to,” Williams said.
Sen. Bob Leeper, a Paducah independent and chairman of the budget committee, said after the panel’s vote that the Senate version takes a more “conservative approach” regarding the savings the administration claims it can achieve next year in Medicaid.  “We believe that's prudent,” he said. “In January, if the savings aren't realized, we would be in a dire situation.”
Thursday was the 11th day of a special legislative session called primarily to balance the Medicaid budget.  Beshear called the session because lawmakers failed to pass a Medicaid bill during the regular session, which ended March 9. 
Courtesy, Courier-Journal.

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