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Fight over Medicaid funding set to continue next year

One of the most acute disagreements of the 2008 legislative session figures to emerge again when lawmakers convene next month.

It took a regular session and a special session that lasted nearly the whole summer before there was a resolution to fund the state’s $90-million Medicaid obligation.

The House of Representatives, led by Speaker Billy McCoy, D-Rienzi, favored an increase on the state’s tobacco tax to pay the tab. The Senate, spurred by Republicans Gov. Haley Barbour and Lt. Gov. Phil Bryant, presented a plan that would have increased the fees Medicaid providers paid. That plan overwhelmingly passed the Senate but stalled repeatedly in the House.

After a stalemate that lasted from April until August, an accounting error revealed that the state had paid too much into the system for several years. That resulted in what was essentially a refund that paid the state’s obligation for this budget year, which started July 1.

Money related to the recovery from Hurricane Katrina paid the tab for the two years leading up to last year.

With those options exhausted, the battle lines in the fight over the Medicaid funding method has have already been redrawn.

In a hearing earlier this month of the Joint Legislative Budget Committee in which the spending recommendations for fiscal year 2010 were adopted, Rep. George Flaggs, D-Vicksburg, said the bulk of Medicaid money should come from an increase in cigarette taxes and not from hospitals. Flaggs has already pre-filed a bill in advance of the regular session that would increase the cigarette tax to $1, up from Barbour’s recommendation of 42 cents.

Barbour’s proposed budget calls for the entire $90 million to be paid through provider fees.

Sam Cameron, president and CEO of the Mississippi Hospital Association (MHA), said the main legislative agenda item for hospitals, as has been the case for a few years, is Medicaid funding.

“That takes priority,” he said.

Cameron said Mississippi hospitals should not be held responsible for the entire amount of the state’s Medicaid costs. Hospitals would be willing to defray $45 million of the $90-million total, but the state should look other revenue streams – specifically one created by an increase in tobacco taxes – to make up the difference.

“That’s always been our position and continues to be so,” Cameron said.

As for Barbour’s plan?

“It’s a tax,” Cameron said. “You can dress it up any way you want to, but it’s still a tax.

Rep. Dirk Deceaux, D-Perkinston, agrees.

“Tobacco causes healthcare problems. Hospitals solve healthcare problems,” said Dedeaux, who chairs the Medicaid Committee. “So, it’s only reasonable to tax the thing that causes the problem, not the thing that’s trying to solve the problem.”

Along with Medicaid, Cameron said another issue the MHA would watch closely is the funding of the Mississippi Trauma Care System (MTCS). The MTCS Trust Fund was established by the Legislature in 1998. It reimburses the state’s emergency rooms and ER physicians for uncompensated care.

“With the continued increase in the cost of care and the number of people who do not have the resources to pay, a lot of hospitals are in jeopardy as far as being able to continue to maintain a trauma system,” Cameron said.

With money in the state’s general fund especially tight for the upcoming budget year, Cameron said innovative funding solutions will have to be struck for the MTCS. For instance, the registration fees owners of boats and all-terrain vehicles pay should go directly to funding trauma care.

“That’s where a lot of the trauma comes from,” Cameron said, referring to accidents involving boats and all-terrain vehicles. “We want to support and work with the Department of Health and the Legislature to continue to address trauma funding.”

Contact MBJ staff writer Clay Chandler at clay.chandler@ msbusiness.com .

About Clay Chandler

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