Friday, February 19, 2010

Week In Review

State Capitol Week in Review

LITTLE ROCK – Senators on the Joint Budget Committee are working to avoid cuts in Medicaid next year.

Medicaid represents an enormous category of state spending. It is administered by the state Human Services Department and paid for with a combination of state and federal dollars. The director of DHS has told legislators that the department will have to cut spending by $400 million, otherwise available funding would be depleted by the end of this year.

The director estimates growth of 8 to 10 percent in Medicaid spending this year, compared to an average growth of 5 or 6 percent in past years. One reason for the surge is that more Arkansans have become eligible because they have lost their jobs in the tough economy. Also, inflation in the cost of medical care continues to outpace the general inflation rate.

The governor and DHS officials say they have not determined yet where to cut services in order to balance the agency's budget. After senators voiced concerns over potential Medicaid cuts during meetings of the Joint Budget Committee, the governor assured them that they would have input in the decision making.

Medicaid pays for health care for the elderly, people with disabilities and the poor. It pays for the care of about 75 percent of all nursing home patients in Arkansas and for more than half of all births. It is a vital source of funding for residential care facilities for people with developmental disabilities.

The state has postponed a planned expansion of ARKids First, a Medicaid program for children in working families. Human Services officials must achieve further savings, and have considered imposing limits on the number of people who are eligible and reducing the number services that Medicaid will pay for. Another option may be requiring Medicaid patients to pay higher co-payments.

Also on the table is the idea of lowering reimbursements to providers such as physicians, pharmacists, nursing homes, hospitals and clinics. That would be controversial because many providers believe current reimbursement levels are not adequate. To date, DHS officials have not made any specific proposals.

The fiscal session has lasted two weeks and it is possible it will finish by Friday of this week. However, a formal adjournment will not happen until March 9.

Between the last day of the session and March 9 attorneys and staff will carefully review all the bills that have been passed, looking for typographical errors or mistakes. The legislature will make any necessary corrections on March 9, but no substantive business is scheduled for that day.

The legislature will gather for a brief session to formally adjourn sine die. After adjournment, the legislature may not reconvene unless the governor calls a special session. The next regular session will begin in January of 2011.

One motive for holding fiscal sessions in even-numbered years is to respond more quickly to budget problems such as the Medicaid funding cuts. In the past, when the legislature met in regular session every two years, a special session probably would have been necessary to iron out budget problems.

No comments: