Gov. Blunt delays payments to hospitals

JEFFERSON CITY, Mo. -- Missouri is delaying at least $90 million in state and federal Medicaid payments to hospitals to try to ease the state's continued cash flow problems, the governor's office and hospital officials 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 due to its major universities.

The hospital and university funds are to be paid before the fiscal year ends 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 a record turnaround 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."

About a dozen of the state's roughly 150 hospitals have expressed concern about the delayed payments, said Dwight Fine, senior vice president for governmental relations for the Missouri Hospital Association.

Blunt spokesman Spence Jackson said the governor's office had heard from no hospitals, but added that the administration would provide all or part of the Medicaid money to individual hospitals that needed it.

Jackson said the delayed payments would free up $30 million in state general revenue. When federal Medicaid money that passes through Missouri is included, the hospitals would have between $90 million and $100 million delayed, Fine said.

He said the state also delayed hospital Medicaid payments each of the past couple years under former Democratic governor Bob Holden's administration.

"It is just the state managing its cash flow," Fine said.

A letter sent to hospital executives by Fine said the state will delay its biweekly Medicaid payments scheduled for April 20, May 5 and May 20. All 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 governor's office provided a copy of the letter to The Associated Press. It encouraged any hospitals that would suffer "unmanageable hardship" to contact the hospital association. Fine said he had passed along details of hospitals needing money to state Medicaid officials.

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.