Medicaid ups deficit request to $89M

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The Division of Medicaid now says it needs $88.9 million to plug budget gaps.

The request came Wednesday in the wake of another round of statewide budget cuts from Gov. Phil Bryant.

Last week, Bryant cut most state agencies by 1.4 percent, which amounted to an approximately $13.9 million cut for Medicaid.

“We’re doing the best we can to manage with what we have, but our hands are tied (in terms of budget cuts), by state law,” said Dr. David Dzielak, the executive director of the Division of Medicaid.

Medicaid had requested a $75 million deficit appropriation earlier in the session to make up for a shortfall in the original budget appropriation as well as a statewide 1.5 percent cut in September.

The Division of Medicaid employs 900 people across the state and operates 30 regional offices. However, Medicaid spends only 2.9 percent of its budget on administrative services, leaving little wiggle room when it comes to absorbing budget cuts, Dzielak said.

If the agency is not fully funded, state law dictates the strategies for making cuts, starting with optional services, such as pharmacy coverage; subsequently, hospitals and provider payments would be cut.