A new Medicaid budget shortfall estimate — disputed by Gov. Mike Beebe (D) — has state lawmakers advocating for a more aggressive budget approach.

Today, State Sen. Jonathan Dismang (R-Beebe) pushed for the Joint Budget Committee to set aside $40 million of the current $72.2 million budget surplus and park up to $60 million of a potential surplus next year in the Medicaid Trust Fund.

Budget leaders rejected Dismang’s proposal arguing that there was no need to restrict the funds. Beebe has also suggested there was no need for urgency in restricting budget surpluses.

The renewed debate was sparked by a recent disclosure by state Department of Human Services officials who revealed that a Medicaid shortfall in fiscal year 2014 could climb from $250 million to $400 million. Beebe has disputed the estimate and asked for more information.

“Because the crisis went from $250 million to $400 million, that’s where you had the foment of ‘What are we going to do?'” said Sen. Gilbert Baker (R-Conway), co-chair of the Joint Budget Committee.

“It’s natural as you get a little bit closer and time goes on — obviously, the great crisis we have on the horizon is going to get more attention,” said Senate President Paul Bookout (D-Jonesboro).

Beebe has been advocating for reforms to the state’s Medicaid program since December 2010, when he announced that Medicaid could fall short of funding revenue by hundreds of millions of dollars.

He has successfully petitioned the federal government for a waiver of the Medicaid program and is currently exploring changes to the state’s “fee-for-service” reimbursement system. Beebe wants to shift to an “episodic care” model, but legislators on both sides of the aisle are asking for more information in anticipation of a potential major policy shift and huge state budget adjustment in a volatile election year environment.

“It appears to me we don’t have a lot of scientific data behind this,” said Rep. Mark Biviano (R-Searcy), who met this week with DHS director John Selig. “This is a long-term problem, but it’s a problem we have today. We can’t wait until next year’s session to address it.”

Biviano said he has more questions than answers for what’s being developed with Medicaid reform and he’d like to be more involved in crafting solutions.

“I shouldn’t have to read about these numbers in the Arkansas Democrat,” Biviano said of the new $400 million shortfall projection. “If that number is known, then we should be honest and open with the people of Arkansas, and the current administration should come forward and say that it’s a possibility that we’re going to have to raise taxes or significantly cut services and what they’ll be… we need to allow both parties to be involved in creating a solution.”

State Sen. Larry Teague (D-Nashville), the incoming President of the 2013 State Senate, said he’s trying to get members “up to speed” with a series of meetings with Medicaid officials and stakeholders.

Teague said the prospects of finding hundreds of millions in savings in a $4.7 billion budget during tough economic times would be daunting.

“A $400 million shortfall in our budget — in our budget a $100 million is a lot of money — it’s hard to go in and cut $100 million,” Teague said.

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Roby Brock
Roby Brock is the Editor-in-Chief and Host of Talk Business & Politics. He can be reached by e-mail at Roby@TalkBusiness.net. Follow him on Twitter: @RobyBrock.