FOR IMMEDIATE RELEASE

July 2, 2008

STATEMENT OF GOVERNOR HALEY BARBOUR

MEDICAID FUNDING PROPOSAL NOT A HUGE BURDEN ON HOSPITALS

Provider Assessments Are Critical for Medicaid

Critics of SB 2013 complain that its Medicaid funding solution places an overwhelming new financial burden on hospitals. The problem is, that’s just not true.

In reality, this proposal would increase the assessment hospitals already pay by only six-tenths of one percent. Such a small increase is enough to fill the current $90 million shortfall and help put Medicaid on a firm fiscal foundation for years to come.

This plan, developed by the Mississippi Hospital Association, the Division of Medicaid and the Governor’s office - and passed 41-to-7 on an overwhelming, bipartisan vote of the state Senate - is a compromise that will ensure the solvency of the Medicaid program while also making sure hospitals pay their fair share.

Under this plan, hospitals would collectively pay in $200 million in provider assessments and get back $1.25 billion in reimbursements and distributions. It’s a good, fair deal that taxes the hospitals, not our citizens - and rightly so. After all, hospitals reap the benefits by getting $6 back for every $1 paid in. In Fiscal Year 2009, Mississippi’s hospitals will receive projected gross revenue of $15.9 billion; the $200 million needed for provider assessments under SB 2013, which include the hospital bed tax as well as a state match for a portion of medical service claims and the federal programs UPL and DSH, equals 1.26% of all hospitals’ total gross revenue.

Provider assessments are essential to the Medicaid program. The FY 2009 Medicaid budget is approximately $4 billion, which includes proposed provider assessments of $292 million from both hospitals and long-term care facilities. If all assessments are eliminated, Medicaid’s budget would only total $2.8 billion, a 30% reduction in Medicaid spending for all providers. Currently, forty-two other states and the District of Columbia use provider assessments to help fund their Medicaid programs.

Mississippians should not be confused by misinformation spread by those who, instead of supporting the only fair, permanent, and sustainable solution to fully fund Medicaid, would rather support their own political agendas. The fact is, the Mississippi House is putting 5,ooo health care jobs in jeopardy by its failure to pass a fair, permanent, sustainable solution to Medicaid funding.

I say it’s high time we quit talking and start doing. The one out of four Mississippians who depend on Medicaid, and the thousands of people who work in health care and related professions, deserve better.