When the proverbial white smoke appeared above the state Capitol Building on Tuesday and it appeared that lawmakers and Gov. Haley Barbour had reached a compromise on Medicaid to complete the state's budget process, it was evident that while Barbour and the Mississippi Hospital Association had buried the political hatchet - the handle was still sticking up.

The surprisingly personal political battle between Barbour and the leadership of the MHA over Barbour's "hospital tax" lasted some three years.

When I first began reporting on the "hospital tax" question in mid-2006, Barbour and the Division of Medicaid said that the Legislature had known for years that the state's Medicaid Disproportionate Share Hospital funding plan was questioned by the federal government.

Both said that the Public Health committees in both houses were specifically advised during the 2006 regular session that the feds would disallow the former funding plan on June 30, 2006. But lawmakers like respected state Rep. Cecil Brown, D-Jackson, disputed that claim.

"We did not know there was a problem for 2007," Brown told me on July 16, 2006. "Certainly if we had known about this during the session, we would have addressed it somehow. It was never mentioned in the (2006) tobacco tax debate, which would have been the logical place for it to come up."

The federal Medicaid disallowance of the state's former DSH funding mechanism left the state's Medicaid program short $90 million that had previously been used to draw down another $270 million in federal matching funds, according to Division of Medicaid executive director Bob Robinson.

MHA in 2006 said Medicaid and the Barbour administration had known prior to 2006 that the DSH mechanism would be rejected. MHA president Sam Cameron said in 2006, and has maintained that a hospital tax is "taxation without representation" of the state's hospitals.

The "hospital tax" raged for three years between Barbour, the Division of Medicaid and the state Senate on one side and Cameron, the MHA and the House on the other. House leaders like Brown called the "hospital tax" a "tax on the sick."

The Barbour administration responded by saying that the funding assessment was in place prior to Barbour taking office in 2004 and that the basic assessment plan had been created and approved by the association in conjunction with the Division of Medicaid and the Legislature.

It was from that long and bitter battle that a Medicaid compromise was forged this week at the Capitol. It's hard to identify many winners from that fray.

But one thing is certain - there are hard feelings on both sides.

Expect the state's "not-for-profit" hospitals - including North Miss. Medical Center, Miss. Baptist Health Systems, St. Dominic, Baptist Memorial, Rush and Jeff Anderson - to draw increased scrutiny over matters like executive salaries, assets, indigent care delivered and other financial measures of their economic health.

How profitable are Mississippi's "not-for-profit" hospitals?

As the economy worsens, the answers to those questions may prove vital in addressing the next Medicaid "crisis" - one that if history holds will come as soon as, well, next year.



Contact Sid Salter at (601) 961-7084 or e-mail ssalter@clarionledger .com. Visit his blog at clarionledger.com. His talk radio show, On Deadline with Sid Salter, is broadcast on the SuperTalk Mississippi network.