State Medicaid deficit still not resolved

Published 12:00 am Monday, March 20, 2017

JACKSON (TNS) — Medicaid officials still are saying the health care agency will need an additional $89 million in state funds to get through the current fiscal year, which ends June 30.

At this point, legislation is alive that would provide Medicaid a maximum of $43 million — less than half of what Medicaid Executive Director David Dzielak said as late as last week is needed for the current fiscal year.

“We’re going to look for extra money. I don’t know where,” House Appropriations Chairman John Read, R-Gautier, told colleagues recently when explaining the budget holes facing Medicaid and other agencies because of sluggish revenue collections.

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Medicaid faces a deficit nearly every year, but because of the state’s sluggish revenue collections, the issue could be particularly perplexing this session.

In response to questions, Read told fellow House members that Medicaid might be able to deal with the potential budget shortfall by not writing checks to health care providers for the final weeks of the fiscal year. Then, when the new fiscal year begins on July 1, Medicaid could pay its debts from the previous fiscal year.

In other words, it could postpone dealing with the issue until the 2018 legislative session without interrupting services for the 760,000 Mississippians who receive health care services through the Medicaid program.

Read told his fellow legislators it is not uncommon for Medicaid to deal with financial woes by postponing payments until the new fiscal year begins.

Dzielak said that is true, but Medicaid has not had to postpone payments because of a lack of funds since 2009 in the midst of the Great Recession before he became executive director.

In addition, there is the question of how long such payments can be postponed. If the Legislature cannot find additional money to reduce the deficit more, it could be too large a shortfall to address by simply stopping payments until the new fiscal year begins.

At this point, no one seems willing to speculate on how the deficit will or will not be resolved.

In a statement, Dzielak said, “Throughout the fall and into the beginning of this year, we’ve been working with the Legislature to address budget concerns. Right now, it’s still too early to tell what will happen with the deficit appropriation. Hopefully we’ll know more after conference weekend.

“Nonetheless, being able to uphold our mission to responsibly provide access to quality health coverage for vulnerable Mississippians, is a continual priority for the agency.”

Saturday, March 25 is the deadline for House and Senate leaders to hammer out a budget accord and is commonly referred to as conference weekend.

It is when the final budgets for all state agencies for the upcoming fiscal year and for deficit appropriations for the current fiscal year are supposed to be agreed to by the leadership. The full Legislature is slated to begin voting on those budget agreements on Sunday, March 26.

At this point, the Legislature’s appropriation for the upcoming fiscal year for Medicaid is $909.3 million in state funds — nearly $100 million less than the $1.03 billion requested by the agency. That shortfall for the upcoming fiscal year could be on top of the deficit for the current fiscal year.

The agency provides health care for the disabled, poor pregnant women, poor children and certain segments of the elderly population, including the vast majority of Mississippians residing in nursing homes.

“Any cut we make will affect the provider community (such as doctors, hospitals, nursing homes and pharmacists) as well as our beneficiaries,” Dzielak said in an earlier interview.

State law gives the governor the authority to make cuts and to levy an additional tax of up to $10 million on Mississippi hospitals to deal with a shortfall. Certain medical services provided by the state Medicaid program are mandated by the federal government, such as hospital visits, and could not be reduced by the governor, but others are not. Surprisingly, providing pharmaceuticals is the largest non-mandated service, meaning it is an area where the governor could make cuts by reducing the number of prescription drugs a beneficiary is entitled to receive.

Asked whether Gov. Phil Bryant is contemplating any action to deal with the deficit, spokesman Clay Chandler said, “It is too early to tell.”

Any shortfall of state Medicaid funds has roughly a four-fold effect in the state. The state gets about $3 in federal funds for each dollar it spends on the Medicaid program.