Blunt defers state hospital payments

Hospitals will be paid in June to avoid late income tax refunds.
Wednesday, April 13, 2005 | 12:00 a.m. CDT; updated 3:33 a.m. CDT, Friday, July 4, 2008

JEFFERSON CITY — The state is delaying about $30 million in payments to hospitals that treat Medicaid patients to try to ease Missouri’s continued cash flow problems, the governor’s office said Tuesday.

The funding cutback is the second in recent weeks by Gov. Matt Blunt’s administration. The state already is delaying $100 million in payments to its major universities.

The hospital and university funds are to be paid before the fiscal year ends on June 30, Blunt’s office said. But they are being delayed to allow the state’s bank accounts to fill up with individual income tax payments, due Friday, and to enable the state to pay back money by the mid-May deadline that has been borrowed from its budget stabilization fund.

The alternative would have been to delay the payment of income tax refunds, said Michael Keathley, Blunt’s Office of Administration commissioner. Instead, the state is processing this year’s refund checks in record turn-around time, he said.

“The priority is to make sure the tax refunds go out on time,” Keathley said.

But the state Democratic Party suggested the Republican governor was mismanaging the state budget.

“It’s telling that so far health care and education are the two places Matt Blunt has gone to balance this year’s budget,” said Democratic Party spokesman Jack Cardetti. “It speaks volumes about his misplaced priorities.”

Cardetti suggested the delayed state Medicaid payments could force some rural hospitals to close and could “cripple our health-care system.”

But Blunt officials said the governor has heard of no hospitals unable to make it because of the delayed payments. If some hospitals would experience financial troubles, the administration would be willing to provide all or part of their Medicaid payments, Blunt’s office said.

A letter sent to hospital executives by the Missouri Hospital Association said the state will delay its biweekly Medicaid payments scheduled for April 20, May 5 and May 20. Those funds will be paid on June 20, but the regularly scheduled June 20 payment will be delayed until July 5 — after the start of the next fiscal year.

The letter, written by Dwight Fine, the hospital association’s senior vice president for governmental relations, encouraged any hospitals that would suffer “unmanageable hardship” to contact the association.

Fine did not immediately return a telephone call Tuesday.

Under Blunt’s previously announced cutbacks, six universities are receiving just 30 percent of the amount they were budgeted to get in March, April and May. But in June, the full amount is to be made up to them.

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