In Depth: The Special Session’s First Days

by Tony McVeigh on March 17, 2011

The special session on balancing Kentucky’s Medicaid budget continues in Frankfort.

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The House Appropriations and Revenue Committee has now heard two days of testimony from health service providers whose budgets are heavily dependent on state Medicaid funding.  Governor Steve Beshear says if lawmakers can’t reach agreement on how to close a huge deficit in this year’s Medicaid budget, he will have to cut reimbursement rates to Medicaid providers by 35% on April 1st.  Steve Shannon of the Kentucky Association of Regional Mental Health Centers says if that happens, layoffs and furloughs will ensue.  And right now, the centers are serving 172,000 Kentuckians with mental disabilities.

“About 70 percent of our business, in some places 80 percent, is people,” said Shannon.  “So, if we have to reduce expenses 35 percent, we have to do something about the people, our employees.  Gotta let ‘em go.”

So will Cedar Lake Lodge in Oldham County, says director James Richardson.  The non-profit intermediate care facility for the mentally disabled serves 240 people, ages 25 to 78.  Richardson says a 35 percent cut would mean an $18,000 per day reduction in the facility’s budget.

“If we were to be faced with a 35 percent Medicaid cut, our current workforce of 360 would necessitate from 80 to 100 jobs cut,” says Richardson.  “As it is now, it takes everyone we have, to meet our regulations and service needs.  We simply couldn’t survive.”

Affordable skilled nursing care centers for the elderly would also suffer, says Kelly Upchurch of the Kentucky Association of Adult Day Centers.  Upchurch says right now, the centers are able to provide nursing care for just over ten dollars an hour.

“There are 21 folks sitting in front of me today,” Upchurch told the committee.  “One in four Kentuckians is a caregiver for a frail, elderly person. That means five of you are taking care of a frail, elderly person right now.  I challenge you to find an RN, LPN or other health care provider that will work for you to take care of that frail, elderly person for $10.28 an hour.”

Gov. Beshear says he can balance Medicaid within the Medicaid budget, simply by moving second year funds forward and covering any deficits with savings from managed care.  Skeptical Senate Republicans prefer across-the-board cuts to state agencies, including education.  But House budget chairman Rick Rand says there’s been no real discussion on the effects of those cuts.  So, more hearings are coming.

“We anticipate the budget director will be in here to begin to talk,” said Rand.  “And if we feel like we need more in-depth information, we’ll call specific agencies in.”

Rand says the committee likely won’t vote on a Medicaid bill until early next week, which means the special session definitely will last two weeks, if not longer.  While the budget hearings continue, House Speaker Greg Stumbo and Minority Leader Jeffrey Hoover keep searching for a compromise acceptable to Senate Republicans.  Hoover says the talks are going well, and numerous ideas are being tossed around.

“We’re talking about a lot of different scenarios and a lot of different possibilities – making sure we have the correct numbers from the budget staff,” said Hoover.  “We’re just talking in broad terms right now.”

As those talks continue, Senate Republicans are offering what they call a Roadmap to a Responsible Solution that calls for ‘reasonable’ across-the-board cuts to state agencies.  That would include cuts to education in the second year of the biennium.  A copy of the document was delivered to the governor’s office, but a spokesperson says Gov. Beshear has not yet seen it.

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