Group threatens legal challenge to Medicaid cuts

Published 6:20 pm Tuesday, July 15, 2008

The Mississippi Hospital Association says it may ask the courts to block Gov. Haley Barbour’s plan to cut $375 million from the Medicaid program because the deep cuts could force some hospitals to close.

Under Barbour’s plan, which takes effect Aug. 6, Medicaid reimbursement rates for hospitals would be reduced by 33.5 percent. Michael Bailey, MHA’s chief financial officer, said the reduction could lead to thousands of hospital layoffs and cuts to patient services.

“It’s a multimillion dollar cut in rates to our hospital providers. Some hospitals would not be able to absorb that,” Bailey said Monday. “We would not discount any and all administrative and legal challenges to stop the Division of Medicaid from making those type of cuts.”

Sign up for our daily email newsletter

Get the latest news sent to your inbox

Bailey said MHA’s first step will be to voice opposition to the proposal at a public hearing on Aug. 1 in Jackson.

Barbour’s plan also reduces payments to pharmacists by 10 percent and nursing homes by 6.1 percent. Others affected include dentists, podiatrists and ambulatory services.

The governor’s action comes after months of haggling between his office and the Mississippi House about how best to pay for Medicaid’s rising costs.

Barbour wants lawmakers to restructure the hospital tax system to generate money for the program. His plan was approved by the Senate but rejected by the House, which wants to pass a cigarette tax as a permanent funding source for Medicaid. Mississippi’s excise tax on cigarettes is 18 cents a pack, one of the lowest rates in the nation.

Barbour is opposed to the cigarette tax and has vetoed similar legislation in the past.

Lawmakers have been in special session since late May to consider a number of issues Barbour placed on his agenda, but Medicaid is causing the stalemate.

House Speaker Billy McCoy, D-Rienzi, said his chamber will present another proposal when the special session resumes Aug. 4. McCoy wouldn’t divulge details, but he said the House maintains its opposition to the hospital tax.

“We’ve compromised halfway already. The governor ought to consider compromise at least one time in his life,” McCoy said Monday. “We will have an additional plan when we come back.”

The MHA has endorsed Barbour’s tax plan, but most members of the hospital association would prefer a cigarette tax increase.

Medicaid receives state and federal money. The program provides health care to about one-fourth of the state’s population, including children, the disabled, elderly and poor. When the new fiscal year began July 1, the program had a $90 million budget hole.

Roy Mitchell, director of the Mississippi Health Advocacy Program, said Barbour and lawmakers must remember that any changes to the Medicaid program have to be approved by the Centers for Medicare and Medicaid Services. Mitchell, whose organization also supports a cigarette tax, said he’s been talking to policy experts in Washington about the situation.

“I feel certain that if the cuts do go into effect, there’s going to be some sort of legal relief available to the advocates,” Mitchell said.