The Mississippi health care community’s trip to the brink ofwhat many hospital officials called irreparable damage was haltedWednesday when Gov. Haley Barbour and the Division of Medicaidwithdrew plans to make $375 million of Medicaid cuts next week.

The decision to withdraw the cuts comes just days after morethan 150 hospitals and nursing homes around the state filed alawsuit in the Hinds County Chancery Court seeking to delay thecuts until early 2009, hoping to give the Legislature more time tofind a solution to Medicaid’s $90 million funding deficit.

The top officials from Lawrence County Hospital and King’sDaughters Medical Center – two area hospitals that signed off onthe lawsuit – said their collective facilities breathed a sigh ofrelief with the news of the suspension of the cuts.

“We’re glad they’re doing it,” said LCH Administrator SemmesRoss. “Anything that helps hold off the cuts until the Legislaturecan solve the problem is good news for us.”

Ross believes the decision to withdraw the cuts was the resultof an accumulation of several factors, including the lawsuit,political pressure and the unknown response to the cuts by thefederal Centers for Medicare and Medicaid Services.

“Some say the courts shouldn’t be involved, but sometimes that’syour only remedy,” he said.

Ross said he and LCH representatives would continue tocommunicate with legislators in an effort to craft the bestpossible funding solution to sustain Medicaid.

KDMC Chief Executive Officer Alvin Hoover said he was anxious tosee what the next proposal would be. But for now, he is relieved tosee the proposed cuts go away.

“We got really close to the wire on that one,” he said. “But itwas certainly the right thing to do [to withdraw the cuts].”

Like Ross, Hoover said he would be in contact with hislegislators as they prepare to rejoin an ongoing special sessionMonday.

What will happen in the next legislative meeting – and if ithappens at all – remains to be seen.

Local legislators have a number of theories about how thegovernor’s withdrawal of his proposed Medicaid cuts will affect theremainder of the special session.

Barbour has threatened the cuts throughout the year as anecessary step if the Legislature did not support Senate Bill 2013,the legislation containing a $167 per day hospital assessment as ameans of funding Medicaid.

With the threat of immediate cuts removed, local legislatorsbelieve SB 2013 will never be heard from again, and other means offunding Medicaid – like increased tobacco taxes – are back on thetable.

“The governor has used the cuts as the bat to try and knockeverybody in the head to go his way,” said District 53 Rep. BobbyMoak, D-Bogue Chitto. “Now that he’s withdrawn them, where’s thebig stick for us to go along with what he wants?”

Moak believes that the Legislature is now wide open for a roundof all-new funding solutions, most likely hybrid bills containing alesser hospital assessment in conjunction with an increased tobaccotax, or even money from the more than $350 million Rainy DayFund.

“Basically, the House’s position has always been that and we’venot backed up on it,” he said. “But I do appreciate the fact thatthe governor withdrew the cuts. I’m glad he came around to thatposition and pulled those back – it saves a lot of people someworry.”

District 91 Rep. Bob Evans, D-Monticello, is content to save theworry for the next legislative regular session in 2009.

“Right now we’re still going back on Monday, but because I andthe majority of the House don’t believe there’s a Medicaid crisis,I don’t see any reason to go back at all,” he said. “January willleave plenty of time to do the things we need to do.”

Evans said that the withdrawal of the cuts proves the widelybelieved notion that there really is no Medicaid funding crisis.The program has enough funds to operate until spring of next year,he said.

“The governor’s actions finally acknowledged that he knew allalong that Medicaid cuts were certainly not legally necessary,”Evans said. “If they were required by law day before yesterday,they should still be required today. Either the law has changed -which it hasn’t – or he was putting forward a misinterpretation ofthe statute.”

Evans agreed with Moak that all Medicaid funding solutionsshould be open for discussion if the Legislature continues in thespecial session.

Of course, the passing of tobacco tax legislation as a means tofund Medicaid has always been popular in the House, but none of thebills have lived through the Senate. Lt. Gov. Phil Bryant hasconsistently blocked them.

District 39 Sen. Cindy Hyde-Smith, D-Brookhaven, said thedisappearance of the cuts on Wednesday makes tobacco tax-relatedbills in the Senate a closer possibility.

“I don’t personally think we should come up with the $90 millionfrom one source only,” she said. “It shouldn’t be 100 percent fromtobacco tax and it certainly shouldn’t be 100 percent from theRainy Day Fund. There’s several options out there and a lot of goodpeople are working on it – ultimately, I think it will be parttobacco, part hospital assessment that they’ve always paid.”

In the future, however, Hyde-Smith the Division of Medicaidwould have to be regulated more closely.

“All branches of government, including the attorney general’soffice, need to be directed toward cleaning up any fraudulentmisuse of recipients,” she warned. “A lot of times, that’s thereason we find ourselves where we are. Some people think a lot ofmoney will make a better system, but until we start investigatingand prosecuting the misuse of this system, money is not gonnahelp.”