Mississippi lawmakers have ended a marathon special session without resolving the Medicaid funding impasse, allowing the governor to proceed with his plan to raise taxes on hospitals to generate money for the program.

Some legislators say Gov. Haley Barbour’s plan to subject hospitals to higher gross revenue assessments, set to go into effect Sept. 1, may draw a legal challenge.

Barbour had called the special session May 21 to cover multiple issues, but legislators have met only sporadically since then.

Mississippi’s Medicaid program has been the sticking point.

Lawmakers reconvened Monday after being gone for a month. The House tried unsuccessfully to consider a new proposal that called for tobacco and hospital tax hikes. House leaders failed to get enough votes to call the bill up for debate.

Republican Lt. Gov. Phil Bryant said he wouldn’t consider another Medicaid funding proposal, anyway. Bryant said he wanted to see if Barbour’s new plan works. Bryant also said the House didn’t approach him or key chairmen about their latest proposal.

“Now at the 11th hour, there is some bill that I have not seen,” Bryant said. “I think we can do this if we need to in January.”

House Speaker Billy McCoy, D-Rienzi, said Barbour and the Senate were unwilling to compromise.

Since the special session began, the House has been trying to raise the tobacco tax to help pay for Medicaid. It is set to run out of money in March 2009, lawmakers said.

The program serves Mississippi’s children, elderly, disabled and poor — about one out of five Mississipians, altogether. It faces a $90 million shortfall in the fiscal year that began July 1, and lawmakers said an even bigger hole is expected next fiscal year.

Initially, Barbour and the Mississippi Hospital Association had proposed a plan to restructure some hospital taxes, but many Democrats said they wanted to increase the cigarette excise tax instead. The state’s excise tax is 18 cents a pack, one of the lowest in the nation.

When the Democrat-controlled House didn’t accept that tax restructuring plan, Barbour threatened to make $375 million in cuts to the Medicaid program — enough to cover the state shortfall and the federal contribution. Last week, the Division of Medicaid rescinded its own proposed cuts before they went into effect.

Barbour said his new solution would generate $88 million of the $90 million shortfall by increasing the gross revenue assessment on hospitals. He said Medicaid can do that without legislative approval. He said the other $2 million would be generated through cuts of less than 1 percent on other provider services.

Mississippi Hospital Association president Sam Cameron said he had not seen Barbour’s plan to determine its full impact on hospitals, but he said some would lose money.

Under the plan, hospitals would be reimbursed with mostly federal money associated with Medicaid. MHA chief financial officer Michael Bailey told the House Medicaid Committee that those reimbursements usually take up to a year. Barbour said reimbursements will be made monthly.

Bailey also said that it’s possible that some hospitals won’t be reimbursed all they money they lose.

House Medicaid Committee Chairman Dirk Dedeaux, D-Perkinston, said the legal question is whether Barber needs legislative approval to decrease the reimbursement rates to hospitals.

Sen. David Baria, a Democrat and attorney from Bay St. Louis, said he expects the MHA to file a lawsuit.

Cameron said MHA would monitor situation and wait for the Division of Medicaid to release the proposal for public comment.

On Monday, Barbour added to the special-session agenda a proposal to establish a public health laboratory for the Mississippi Department of Health. The House and Senate passed separate versions of the bill. However, the lab legislation died when lawmakers adjourned without agreeing on a single version.