Wednesday, March 16, 2011

Special Session - Day 2 Update

Special Session - Day 2 Summary


Probably, the big news out of Day 2 is that Speaker Stumbo and House Minority Leader Hoover have met and are discussing a compromise plan from the House on HB 1 to deal with the Medicaid budget shortfall. Although details are not clear at this point it appears that they are looking at a plan that would give the Governor an opportunity to make savings in Medicaid, but if he is unable then cuts would be made to state government to balance the budget. The one area that would not be cut is education. This is still in its early stages and according to press reports the Senate has not been involved in these discussions thus far.


After beginning with a flurry on Day 1, the second day of the Special Session got down to business with several committees meeting. House Bill 2, Rep. Greer's legislation to raise the drop out age to 18 by 2016, being voted out of committee and headed to the House floor for a vote on Wednesday. Here is a recap of today's legislative activity:


House
As is usually the case in special session's involving the budget the activity begins in the House. That was the case today with three House Committees meeting and taking testimony on how possible budget cuts would impact various areas of state government.


Education Committee: Passed out favorably HB 2, legislation to raise the drop out age to 18 by 2016. The committee also heard from representatives of various education groups about how past, current and proposed budget cuts would impact everything from small independent districts, teacher staffing, and implementation of past legislation regarding testing. The general theme was that they are running on very tight budgets now and further cuts would directly impact services provided.


Appropriations & Revenue Committee: Did not vote on HB 1, the vehicle for amending the budget to deal with the Medicaid budget shortfall. They did take testimony on the impact of the proposed 35% cuts to Medicaid reimbursements to providers if the legislature is unable to solve the Medicaid budget deficit. The committee heard testimony from the KHA, KMA, Local Pharmacies, and KY Health Care Facilities Assoc. Here are the high points:


KHA:  The cut equals a $125 - $130 million dollar reduction to hospitals in Kentucky. The reimbursement cuts will likely lead to employee furloughs, reduction in hours, delay in hiring, and suspension of certain services. In response to a question, Mike Rust said that he does not anticipate any hospitals shutting down over the 3 months that cuts are in place.

American Pharmacy Services Corporation: Represents roughly 200 independent pharmacies in mainly rural counties discussed examples as to what a pharmacy will lose due to the cuts. One such example is that a pharmacy will lose roughly $64 for every 30 day supply of Lipitor.

KMA: The reimbursement cuts will effect 8400 physicians statewide. Many doctors have said they may not stop seeing Medicaid patients altogether, but they will be forced to reduce the number of patients they do see.  It was also pointed out that the cuts will have a devastating effect on doctors who practice in the rural areas of the state and depend largely on Medicaid and Medicare patients.

The Kentucky Association of Healthcare Facilities: Had a similar story to tell. On average statewide, nursing facilities depend on Medicaid for 65% of their budgets.

Judiciary Committee - Heard from several groups including Justice Secretary Brown who discussed how the proposed budget cuts could affect implementation of HB 463, the corrections/penal code reform legislation passed in the 2011 Regular Session. There was also presentations from prosecutors and public defenders that in essence these budget cuts amounted to less people and would increase case loads.


On the floor today, the House gave 2nd readings to HB 1 & HB 2. The schedule for tomorrow is:


10:00 a.m. House A&R Committee will meet and hear further testimony regarding budget cuts effects on agencies.
2:00 p.m. House Convenes for a vote on HB 2, the drop out bill.
Upon House Adjournment: The House Democrats will be caucusing, most likely on the proposed compromise discussed above. That could mean HB 1 could move out of the House on Thursday.


Senate
Things were relatively quiet in the Senate today, which is natural given that the House generally gets first bite of the apple on appropriations bills. That being said the Senate did give second reading to SB 1, 2, and 3, although its not clear if any of these can be acted on in this special session.


We will continue to keep you updated as things develop.

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