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March 23, 2011

Compromising health

The real cost of potential Medicaid cuts in Kentucky

As the Kentucky General Assembly scrambles through the special session in an effort to avoid looming cuts to Medicaid reimbursement rates, Annette Baylon fears the effects those cuts would bring.

The mother of an 18-year-old who is mentally retarded, autistic and bipolar, Baylon relies on Medicaid for her son’s health care, which includes extensive therapy from a behavioral specialist. Her health care provider recently contacted her to explain that if the Medicaid budget is not fixed by April 1, she will be in jeopardy of losing her son Simon’s coverage.

“This will desperately affect me,” Baylon says. “When change happens in our lives, his life, there are a lot of things that come from it: He becomes more aggressive, his behavior changes, he breaks things. These children, their whole lives are based on routine. Once you put a ringer in that, it means it will affect many people — the children, the families, the caregivers, the schools — it goes on and on.

“(The therapist) has been working with my son for eight years, and we’ve made tremendous progress with her. We could not live without her, honestly.”

Democratic Gov. Steve Beshear called for a special session to begin March 14 after the state House and Senate could not agree on a solution to fix the $139 million shortfall in this year’s Medicaid budget. Beshear declared that if a compromise is not reached by April 1, there will have to be a 35 percent cut in Medicaid reimbursement rates through June 30. Such cuts would likely lead to Medicaid providers making significant layoffs, or even dropping Medicaid coverage altogether.

Simon Baylon receives therapy through Family Links of Kentucky, a mental health agency in Buechel that provides services to children, adolescents and their families. Kay Hunter, president of Family Links, explains that a cut in reimbursement rates would make it extremely difficult for her agency and other Medicaid providers to continue services or even stay in business.

“For a lot of Medicaid providers, they don’t know how they would manage to survive for three months,” she says. “For instance, my agency, we don’t even have a 30-day reserve. To get through this, you’d need more like a 120-day reserve. So I think layoffs for a variety of agencies are inevitable; if not layoffs, then rate cuts.”

Family Links of Kentucky serves approximately 150 clients in Louisville, all of whom are covered under the Medicaid program Impact Plus.

A cut in reimbursement rates will make doctors less likely to provide Medicaid coverage for low-income patients.

“One of my huge concerns is that it’s very difficult now to get a physician — particularly a child psychologist — to accept Medicaid as reimbursement,” Hunter says. “I’m sure there are going to be a lot of physicians who say, ‘Whoa, wait a minute, we’re not taking any more Medicaid patients.’ The rates are already low. It’s already difficult to get a physician to accept Medicaid. This is going to make it even harder to get basic medical care for our kids.”

The Cabinet for Health and Family Services announced on March 11 that the cuts would affect 8,400 physicians, 1,300 pharmacies, 300 nursing homes and 80 hospitals throughout the state, as more than 800,000 Kentuckians depend on Medicaid.

On Monday afternoon, the state House took a step toward averting this crisis, easily passing a bipartisan bill that would transfer $166 million from next year’s Medicaid budget to this year, hoping to make up for next year’s budget through savings measures with managed care programs. The bill differed slightly from the one the House passed during the regular session, as it has “triggered cuts” that would take effect within state government if the Medicaid savings don’t materialize by Aug. 15.

House leaders hope this will meet the requirements of the state Senate. Just before the regular session adjourned, the Senate passed a bill that would cut education and other services to make up for the Medicaid shortfall. The House, including all 41 Republicans, panned the proposal. Their inability to come to an agreement prompted Beshear to call the special session, threatening the need to cut Medicaid if they failed to do so.

As the Medicaid crisis unfolds in Frankfort, November’s gubernatorial election looms. In recent weeks, Gov. Beshear, who is running for re-election, and Republican Senate President David Williams, the likely GOP candidate for governor, have repeatedly taken shots at each other in the press over their proposed Medicaid solutions.

The fate of the House bill now lies with the Republican-controlled state Senate. 

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