Perdue: Lawmakers reneging on Medicaid shortfall

RALEIGH -- How to close North Carolina’s projected $139 million Medicaid shortfall this year is once again breeding conflict between the governor’s office and Legislature.

Gov. Beverly Perdue’s administration on Tuesday accused the Republican-led General Assembly of reneging on a promise to help narrow the expected spending gap by infusing some cash, citing a letter written by legislative leaders as proof. But Republicans, who maintain that they’re open to working with the Democratic governor, said she’s the one who’s got to manage the budget they passed over her veto.

Without help, Perdue aides say, the Department of Health and Human Services will be required to cut further how much they reimburse medical providers for Medicaid patients and eliminate services the federal government doesn’t require the state to provide.

“The law very clearly lays out how we must find the money,” Perdue senior adviser Al Delia said. “They’re not the primary ways to deal with it. It’s the only way.”

A GOP budget-writer and House Speaker Thom Tillis’ office disagreed with Delia’s interpretation of the Nov. 17 letter. In it, Tillis and Senate leader Phil Berger told Health and Human Services Secretary Lanier Cansler that it was up to his department to carry out the budget that the Legislature approved.

Cansler wrote to them on Nov. 15 seeing what kind of assistance the General Assembly could provide after Tillis suggested earlier in the month that reserves and a revenue surplus could be tapped to avoid the burdensome service cuts upon Medicaid patients.

“We have every faith and expectation that you, along with the governor, will address the Medicaid shortfall within this authority without taking the drastic measures you mentioned in your letter,” Tillis and Berger wrote in the letter, first reported on by WRAL-TV.

Lawmakers are meeting regularly with Cansler and others and are willing to listen to Perdue’s suggestions on tapping into sources of money to close the gap, said Rep. Nelson Dollar, R-Wake, co-chairman of the House Appropriations Committee. But he said it was still Perdue’s job to meet the reductions.

“The General Assembly passed the budget. The governor needs to execute on that budget,” Dollar said. “The governor needs to come up with one-time money from the budget as a whole … to address that cash flow problem.”

Delia countered by saying the governor can’t appropriate funds from reserves – that’s up to the General Assembly. Lawmakers had the chance to do that last week when they were in town for a mini-work session but didn’t act, he said.

“The only people that can change the law are the General Assembly,” he said.

Dollar said rate reductions and eliminating optional services – hospice and adult dental care are among them – still aren’t practical options, as he told Cansler at a committee meeting last month.

“The speaker believes this shouldn’t turn into a `he said, she said,’ back-and-forth between branches of government,” Tillis chief of staff Charles Thomas said Tuesday. “Instead, reasonable people should come together to find solutions to problems.”

The resurgent tussle over Medicaid is the latest fight over a $19.7 billion budget that was enacted in the summer when the Legislature overrode Perdue’s veto of the spending plan.

Perdue and her allies have said budget-writers required unrealistic spending reductions. The budget demanded $356 million in cuts to the agency that oversees Medicaid, the government health program that covers almost one in every six state residents – mostly poor children, older adults and the disabled.

“In short, the same people who created this problem are now unwilling to take responsibility for fixing it,” Rob Thompson, executive director of the Covenant with North Carolina’s Children, said in a statement.

Republicans have blamed the shortfall on federal regulators for failing to sign off on Medicaid plan changes and the repayment of financial errors that occurred during then-Gov. Mike Easley’s administration.