FRANKFORT — A special legislative session to fix the state's Medicaid budget will probably last more than a week as the House works on a bipartisan compromise that might placate Senate Republicans, House Speaker Greg Stumbo said Tuesday.
Stumbo, D-Prestonsburg, said he and House Minority Leader Jeff Hoover, R-Jamestown, are discussing targeted spending cuts in state government that exempt education programs as a possible compromise on the issue. The special session started Monday and costs about $63,500 a day.
Meanwhile, lawmakers heard dire predictions of possible layoffs and furloughs in the health care industry if the General Assembly can't close a hole in the Medicaid budget before April 1. Public safety officials also warned cutting other parts of state government to shore up Medicaid might cause layoffs of prosecutors and closure of domestic violence shelters.
Stumbo said Tuesday he has not spoken to Senate President David Williams, R-Burkesville, about a possible compromise. Williams said the Senate is "always available" to listen and hopes the issue can be resolved quickly. The Senate ended this year's regular session of the General Assembly last week after the House and Senate reached an impasse on how to fix the Medicaid budget.
The House probably won't vote on a new version of the Medicaid budget bill until early next week, Stumbo said. He declined to guess how long the special legislative session might last.
"We are going to do our job as quickly as we can," Stumbo said, but lawmakers want to hear more testimony from officials about how additional budget cuts would effect day-to-day operations of state government.
After meeting with Stumbo, Hoover said the two discussed several possible solutions, including targeted cuts, but an agreement was not reached.
"We're going to have staff look at some numbers and meet again tomorrow," Hoover said.
Health care providers told the House budget committee on Tuesday a possible 35 percent cut to Medicaid providers might prompt some to leave the health care program for the poor, aged and disabled.
"The reality of the situation is that some pharmacies will be forced to close," said Cathy Hanna of American Pharmacy Services Corp., which represents 200 independent Kentucky pharmacies. "If pharmacies drop out of the program, Medicaid recipients will have a hard time accessing lifesaving drugs, particularly in rural and medically underserved areas."
Beshear has warned that if the Democratic-controlled House and the Republican-controlled Senate do not reach a compromise on the Medicaid budget, his only option would be to cut payments to Medicaid providers by 35 percent on April 1. The cuts would last until June 30, the end of the fiscal year.
The House budget committee heard testimony from hospitals, pharmacists, doctors and nursing homes, and the panel plans to hear more from health care providers and others in coming days.
In the 2011 regular session, the House approved Beshear's Medicaid budget proposal, which included moving $166.5 million from next fiscal year to the current fiscal year. Beshear has said he can make up the $166.5 million loss in the second year by implementing a series of managed-care programs within Medicaid.
Senate leaders said they didn't believe Beshear could generate the savings next fiscal year and passed a budget fix that included across-the-board cuts to state government. The Senate budget proposal filed late Monday includes 0.325 percent cuts for the remaining months of the current fiscal year, which ends June 30, and a 1.58 percent cut to state government in the next fiscal year. The main funding formula for schools would see a 0.65 percent cut in the second year but would not be cut in the first year.
Michael Rust, president of the Kentucky Hospital Association, told the House budget panel Tuesday that some hospitals with a high percentage of Medicaid patients will likely have to furlough or possibly layoff employees to deal with a 35 percent reduction over three months.
Unlike other health care providers, hospitals are required to treat Medicaid patients. Rust said hospitals also are concerned that some doctors may refuse to see Medicaid patients, sending them to hospital emergency rooms for treatment instead.
Total cuts to the state's hospitals would be between $125 million and $135 million, Rust said.
Terry Skaggs, owner of Well Health Systems, which includes seven nursing homes in Western Kentucky, said cutting Medicaid payments by 35 percent would reduce the nursing homes' income by nearly 46 percent over three months, Skaggs said.
"We can't make up 46 percent of the costs," he said, warning that care of the elderly and vulnerable would be at risk.
When asked how he would manage, Skaggs said "we would be choosing between the mortgage and making payroll.".
Public safety cuts
The House Judiciary Committee also heard testimony Tuesday about what cuts across state government would mean to the state's justice system.
Justice and Public Safety Secretary J. Michael Brown told the panel reduced spending would harm the much-praised House Bill 463, which rewrites much of Kentucky's criminal code to reduce prison and jail crowding.
After eight budget cuts in the last three years, Brown said, slashing spending again would be "like one step forward and two steps backward."
In the corrections department, he said, the Senate's proposed cuts could amount to $1.36 million this year and nearly $6.12 million next year for adult institutions. The department would likely have to layoff staff and reduce mental health treatment and educational and vocational programs for inmates, Brown said.
Other cuts in the corrections department, he said, could mean suspension of funding for substance abuse treatment, suspension of a program to notify victims of any change in their offenders' status and limited hiring and training of probation officers. He said contracts to operate juvenile justice centers in Mount Sterling and Owensboro also might have to be terminated.
State Public Advocate Ed Monahan told the House committee cuts in his department would bring layoffs — possibly 22 lawyers this year and 30 next year. That would increase each lawyer's average case load from 460 to more than 500.
"If we don't have adequate resources, we can't do our job no matter how talented we are," he said.
Warren County Commonwealth's Attorney Chris Cohron said cuts would mean the firing of 20 lawyers in the state's 57 commonwealth's attorneys' offices at a time when the state is experiencing "an explosion of meth labs."
Darlene Thomas, executive director of the Bluegrass Domestic Violence program, said some domestic violence programs in the state would have to close with cuts.
"We're life and death for so many," she said.