Hospitals fight governor's Medicaid proposal

JACKSON, Miss. (AP) - Gov. Haley Barbour's plan to pay for

Medicaid violates state and federal laws, according to attorneys

for nearly 40 hospitals.

The hospitals have not legally challenged the proposal that

would increase their taxes, cut Medicaid reimbursements and replace

the cuts with federal money associated with the health care


But they are exploring options in Hinds County Chancery Judge

Patricia Wise's court. Wise was asked Friday to keep alive a case

that stopped Barbour's previous plan to make deep cuts in Medicaid

services until the agency provides more proof of why the reductions

are needed.

The state wants Wise to dismiss the case, since Barbour withdrew

that plan after her ruling. She did not make an immediate ruling.

John Sneed, an attorney for the hospitals, contends that the

governor's new plan is "a thinly veiled attempt" to fund the

shortfall through a method that another judge said violated state


Barbour has said his plan is allowed under the previous ruling.

Medicaid serves almost 600,000 low-income Mississippi residents

and faces an annual shortfall of about $90 million.

Barbour, who oversees Medicaid, said his plan ends a monthslong

battle with lawmakers over the proper funding source. A special

legislative session ended last week with no resolution between

Senate leaders who sided with him on a hospital tax and House

Democrats who preferred including a tobacco tax hike.

Lawmakers have used one-time money as a past funding solution.

Under Barbour's plan, hospitals bear the burden of filling the $90

million hole. The governor contends it will not result in higher

costs to patients.

Barbour said that without the plan, he'll have to cut the

Medicaid budget. State law gives a governor authority to make cuts

when Medicaid faces a deficit, but House Democrats say cuts are

unnecessary now and have not been made previously in Barbour's


Officials with the Mississippi Hospital Association said the

plan concerns them because it usually takes a year for hospitals to

be repaid with federal money.

(Copyright 2008 by The Associated Press. All Rights Reserved.)