KHI News Service

Senate committee revises budget plan

Tax work expected to start Friday morning

By Mike Shields | April 29, 2010

The Senate Ways and Means Committee today revised the budget plan it approved last week, reducing a projected $486 million budget shortfall to about $418 million.

Still to be done is a tax package to fully close the smaller budget gap that the new version of Senate Substitute for House Bill 2361 would create.

Committee Chairman Jay Emler, R-Lindsborg, said the panel would begin work on a tax proposal at 8:30 a.m. Friday.

The panel found about $91 million to shrink the budget hole by:

  • Deleting $21.8 million in disaster relief funding for the adjutant general's office. Officials said that money had been budgeted to pay the state's share of recovery from several ice storms but that so far the state has kept pace with its portions of the recovery bills.
  • Extending delayed bid letting for road work into the fiscal year that starts July 1 to the tune of $44.3 million.
  • Pocketing $12 million from a continued moratorium on state payments into the death and disability fund for state workers.
  • Cutting state pension contributions to school workers by $12.8 million.

The committee also agreed to about $7 million more in spending on social services and child development programs, including:

  • $375,000 for the Tiny K program.
  • $225,000 for Early Head Start.
  • $4.5 million for community programs serving the developmentally disabled.
  • $3.1 million for home and community based services for the disabled.
  • $52,000 for a program that aids those with cerebral palsy or autism.

Members also endorsed $400,000 more for the court system, which has been forced to furlough employees because of budget cuts last year, and $3.6 million for universities to use toward debt service.

The bill was approved, 10-3.

After some discussion, the committee rejected a proposal to contract with a company that supporters said could gain the state $40 million in recovered Medicaid payments.

That provision was included in a House budget bill, but senators said there were too many questions about the proposal and that it had been brought too late in the session for serious consideration.

The language in the House bill was narrow enough that the contract would go to HMS, a company that specializes in Medicaid collections.

The firm already has contracts in Kansas, working with the Kansas Health Policy Authority on recoveries from the estates of Medicaid beneficiaries. The firm had that contract renewed in April. HMS also contracts with HP, the company that processes the state's Medicaid claims and payments.

Nancy Gress, regional manager for HMS, told KHI News Service that the firm has saved the state about $65 million from that contract work since 2002.

She said HMS was the only company that could provide the service currently being considered by legislators, "because we don't have a competitor."

Gress said the company typically keeps between 10 percent and 25 percent of its recoveries, depending upon the package of services a state chooses. She said HMS, which is headquartered in New York City, has provided services to governments for 30 years and now has business in 40 states with about 25 offices nationally.

Gress said the company maintains databases that include information from more than 600 million private insurance claims. Those are matched against Medicaid enrollment lists and when a match is found the private insurer is billed because Medicaid is a payer of last resort.

HMS officials met Thursday with officials from the Kansas Health Policy Authority to discuss the proposal that was rejected by the Senate committee.

Ron Hein is the HMS lobbyist at the Statehouse.

In other legislative action Thursday, the House effectively dismantled a bill that would have postponed until January enactment of a statewide public smoking ban signed into law last month. The ban is scheduled to begin July 1.