Medicaid not as bad as feared, chief says

Gene Gessow, the state’s Medicaid director, explains the state’s Medicaid costs Tuesday at the Capitol.
Gene Gessow, the state’s Medicaid director, explains the state’s Medicaid costs Tuesday at the Capitol.

— The Arkansas Medicaid program isn’t in such poor financial shape as initially projected, legislators learned Tuesday.

They also fought to keep their local project dollars.

Gov. Mike Beebe wanted to shift $9.2 million from General Improvement Fund projects in legislative districts to help shore up the fiscal 2010 budget.

The Joint Budget Committee voted to surrender no more than $6.3 million, amending bills to draw money from other sources for the remaining $2.9 million.

“The General Improvement Fund is like crack cocaine for the Legislature,” a frustrated Sen. Jimmy Jeffress, D-Crossett, told colleagues.

Later, the Public Health Welfare and Labor Committees heard from Departmentof Human Services Director John Selig and Medicaid Director Gene Gessow about their strategy for the Medicaid program in fiscal 2011.

Last month, Selig said that the state must find a way to head off $400 million in expected growth in the entitlement program for health care for the poor, elderly and disabled.

“My view is it’s not going to be quite as drastic as wethought 30 days ago,” said Sen. Percy Malone, D-Arkadelphia, Senate Public Health chairman.

Selig confirmed that, saying the state will likely receive some unexpected money.

“There is some hope out there,” Selig said. “To the degree we have those one-time funds available that [delays] the kind of cliff we face and gives us an opportunity to do some planning and maybe come up with some alternative solutions.”

Beebe wants the department to use those funds to delay more serious cuts in Medicaid services, Selig said.

But “for now,” Selig said, the department will continue to look for ways to cut $400 million from the Medicaid budget for fiscal 2011, which would be about $100 million in state general revenue and about $300 million in federal funds.

The total Medicaid budget for Arkansas is about $4 billion a year.

Selig outlined the one-time money as being:

$16 million from a settlement with pharmaceutical companies announced last week in a lawsuit filed by Attorney General Dustin McDaniel.

$24 million expected in federal money tied to the state’s care of foster children.

The possibility of an additional $160 million if the stimulus money for Medicaid is extended for another six months. It’s now set to run out Dec. 31.

Gessow, who has been on the job for six weeks after similar positions in Rhode Island, Massachusetts, Maine, Iowa and New Mexico, said he welcomed input from legislators and Medicaid providers.

“We have experience, but we are not the fount of all knowledge,” he said.

Gessow cautioned against thinking problems could be solved by:

Across-the-board cuts to all Medicaid providers. That’s the easy way out, he said.

Charging Medicaid recipientsmore co-payments. The federal government mandates that copayments be nominal, he said.

Rooting out fraud. He expected fraud would amount to no more than one-quarter of 1 percent of the Medicaid budget, he said.

Cutting administration costs. Administration costs are about 2.5 percent of the Medicaid budget, he said.

Medicaid serves about 775,000 Arkansans, and costs are expected to rise as more people apply for help as a result of losing their jobs and from increased medical costs, Human Services officials have said.

PROJECT DOLLARS

The budget committee voted Monday to accept Beebe’s plan to fund two items from legislative local project dollars:

$4.2 million to reimburse county jails for holding state inmates.

$1.6 million for the Department of Community Correction to pay its medical contracts.

But the committee stripped provisions to fund four other items with local project dollars:

$1.6 million to help the legislative redistricting at the secretary of state’s office after the 2010 census.

$200,000 for defibrillators at public schools through the Department of Health.

$600,000 for electronic health information records.

$1 million for the Youth Services Division.

The Legislature agreed in 2009 to hold back these local project dollars in case they were needed for budget shortfalls.

But this year, legislators, led by Rep. Curren Everett, D-Salem, had second thoughts and wanted to make sure their community centers, fire departments and other entities received full funding.

The budget committee voted Tuesday to fund the redistricting project from what the state calls the Central Services Fund, which finances elected officials’ offices, the courts and other offices considered to be central to the administration of government.

Richard Weiss, director of the Department of Finance and Administration, called that plan “very precarious” because the Central Services Fund is projected to have a $1.8 million deficit at the end of the current fiscal year.

But Sen. Paul Miller, D-Melbourne, said the finance department frequently paints worstcase scenarios for the fund.

For the health records and defibrillators, the committee voted to take it from the Unclaimed Property Trust Fund.

The governor already wants to take $21 million from that fund to help the Public School Fund and taking more would be “pushing the envelop,” Weiss said.

But Chief Deputy Auditor Larry Crane, who works in the office that oversees the Unclaimed Property fund, said as much as $25 million could be taken from it and leave the state plenty of money to pay claims.

Rep. Bruce Maloch, D-Magnolia, co-chairman of the budget committee, made one last attempt to shift some of the local project dollars, asking his colleagues to use $1 million for the Youth Services Division.

“I think we look petty,” Maloch said.

The committee rejected Maloch’s idea.

Miller then offered a compromise to fund $500,000 from the Unclaimed Property Trust Fund and $500,000 from local projects. The committee accepted that idea.

Beebe spokesman Matt De-Cample said later that the governor will sign the bills into law.

PULASKI COUNTY

The House accepted an amendment by Rep. Barry Hyde, D-North Little Rock, to distribute about $60,000 to fire departments in Little Rock, North Little Rock, Jacksonville and Sherwood. Mayors from those cities had complained that Pulaski County officials shorted them money in a previous distribution of state fire department dollars.

Rep. Dan Greenberg, R-Little Rock, complained, saying he thought smaller fire departments deserved more money and that the amendment may be unconstitutional local legislation.

Hyde’s amendment would send Little Rock, $41,954; North Little Rock, $12,501; Jacksonville,$4,043; and Sherwood, $1,402.

The amendment is in House Bill 1145, which the House has not passed.

HALTER

A divided Personnel Subcommittee rejected a proposal by Rep. Keith Ingram, D-West Memphis, to cut Lt. Gov. Bill Halter’s proposed operations appropriation from $366,695 to $129,580 in the fiscal year starting July 1.

Ingram proposed cutting the office’s four employees to one.

Legislators asked why Ingram was singling Halter out.

Lieutenant governor is a parttime position and doesn’t needmuch staff, Ingram said.

STATUS

Legislative leaders say they are on track to end the state’s first fiscal session Friday, when the Legislature would take the final steps on the Revenue Stabilization Act, which lays out the distribution of $4.5 billion in general revenue in the fiscal year that will start July 1, and the bills setting the amounts for the lottery scholarships.

Beebe has signed 199 bills into law this session.

Information for this article was contributed by Michael R. Wickline of the Arkansas Democrat-Gazette.

Calendar These are the 87th General Assembly’s public events today, the 17th day of the fiscal session: JOINT Upon adjournment of both chambers, Energy Committee, Room 171.

Upon adjournment of both chambers, Public Retirement and Social Security Programs Committee, Room 130.

Call of the chairman, the Budget Committee, Room 171.

HOUSE 10 a.m., Children and Youth, Legislative & Military Affairs Committee, Room 130.

1:30 p.m., the House convenes.

SENATE 10 a.m., Children and Youth Committee, Room 130.

1:30 p.m., the Senate convenes.

Arkansas, Pages 11 on 02/24/2010

Upcoming Events