Discovery of error helps Miss. plug budget hole

Published 1:36 pm Wednesday, September 10, 2008

The discovery of a five-year-old clerical error has solved one of Mississippi’s biggest budget problems, a $90 million Medicaid shortfall, at least for this year, Gov. Haley Barbour announced Monday.

The Republican is seeking to turn the error into ammunition against Democrat Ronnie Musgrove, who was governor when it happened and is running for U.S. Senate this year against a Barbour appointee.

A “junior staff person” was working on the Medicaid budget in June and discovered a possible error from October 2003, during the final months of Musgrove’s term, Barbour said.

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The federal Centers for Medicare and Medicaid Services agreed Friday that for nearly five years the state has had too many people listed as eligible for both the federal Medicare program for the elderly and the federal and state Medicaid program for the needy.

The incorrect information has been carried forward each month since, meaning the state was spending about $18 million a year too much on Medicaid.

The federal government is refunding about $92 million, almost exactly the amount needed to cover a $90 million Medicaid shortfall for the budget year that started July 1. The refund, however, is only a one-time fix, since legislators will face the same shortfall again next year.

Barbour had called legislators into special session in late May to try to plug the hole, created because the federal government told Mississippi three years ago to stop using part of a complicated formula that had helped pay for the program.

Since then, the shortage has been covered by Hurricane Katrina money and other federal funds. This state budget year started with no resolution because hospitals balked at paying fees Barbour proposed.

Barbour has consistently said Musgrove, whom he defeated in November 2003, left Mississippi’s budget a mess. Musgrove has said he was fiscally responsible during a national economic downturn.

This year, Musgrove is locked in a tough U.S. Senate campaign against Republican Roger Wicker, whom Barbour temporarily appointed to fill the seat Republican Trent Lott vacated when he stepped down in December. The winner will fill the last four years of Lott’s term, and Democrats are hoping this is their chance to win the seat in heavily Republican Mississippi.

“It defies credibility that Haley Barbour is still trying to pass the buck on his Medicaid failures,” said Adam Bozzi, Musgrove’s campaign spokesman. “It is time for him to take responsibility for his administration.”

Barbour, who took office in January 2004, said he would have blamed the error on himself if he had been governor in October 2003.

“Not finding it any sooner, I blame on me,” Barbour said. “But it was one of the several enormous financial errors in Medicaid that occurred during the Musgrove administration.”

The windfall from the clerical error will only solve the Medicaid problem this year. During the regular session that starts in January, lawmakers will have to find another $90 million for next year’s Medicaid budget, Barbour said.

Meanwhile, he has a reward in mind for the unnamed staffer who discovered the clerical error.

“They’ll get a cold beer from the boss, I’ll tell you that,” Barbour said.