Committee Reduces Rate Increases Promised to Health Care Providers

By JoAnne Young
For the Lincoln Journal Star
Lincoln, NE
November 12, 2009

They said decisions about budget cuts would be hard.

The difficult discussions began in earnest Thursday morning in the Legislature's Appropriations Committee, starting with a decision to reduce increases private providers of health care services for the state would get next year.

The committee will recommend those increases be reduced to 0.5 percent for behavioral health, public assistance and Medicaid providers. For providers of services for developmentally disabled and aging clients, the increase would be 1 percent. The smaller increases discussed a week into a special budget-cutting session would save $7 million in an effort to meet the $334 million deficit.

The action Thursday also would send back to the general fund $500,000 that was not used this year to move developmentally disabled clients off of the waiting list for services.

The provider rate increases were established in the 2009 legislative session with long, intense discussions. There was to be a 1.5 percent increase in 2010-11 for behavioral health, public assistance and Medicaid providers, and a 2.5 percent increase for providers of services for developmentally disabled. Those providing care to aging clients were to get 3 percent.

Those increases would have amounted to $20.9 million next year.

Some Appropriations Committee members argued Thursday that private providers have not kept up with salaries and benefits of state workers. The providers had made some gains recently, and the state had seen some positive benefits, said Lincoln Sen. Danielle Conrad.

"These are actual direct services to our most vulnerable citizens," she said. "This is a morale issue far more than a budgetary issue."

Appropriations Committee Chairman Lavon Heidemann said that if the committee reversed the proposal in Gov. Dave Heineman's budget to take away that $20.9 million, the amount would have to be made up elsewhere.

"That makes me nervous about where you're going to hit someplace else," Heidemann said.

Lincoln Sen. Tony Fulton said his concern was that provider rate increases were for the private sector, which has to react to the marketplace in competing for employees and running businesses.

The committee had looked at a proposal to restore half of the increase amounts, but even that would have been $11 million.

"Restoring half is probably larger than we can afford to do," said Sen. John Wightman of Lexington.

Sen. John Harms of Scottsbluff said the vote was "very painful for me." It was hard for him to accept reductions in provider raises, but at the same time, he said, he didn't know where else in the budget senators would find $21 million.

Several committee members talked about how tight the budget could be in the 2011-13 cycle unless the economy turns around drastically.

"If we don't focus on (those future years), we will really be in trouble," Harms said.

Including the cuts the committee restored on Wednesday, said Wightman, "I don't think we're going to come out of this special session with a balanced budget."

That is, unless the Legislature dips into the cash reserve or goes deeper with other cuts, he said.

The possibility of raising taxes is not included by the governor in other remedies the Legislature could use.

Reach JoAnne Young at 473-7228 or jyoung@journalstar.com.

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