Budget has possible $50 million hole

Wednesday, March 31, 1999 | 9:54 a.m.

Guinn and his staff balanced the $3.1 billion general fund budget in part by pulling nearly $50 million out of Medicaid reserves. They were able to do that because welfare and other social services reforms have caused Medicaid caseloads and expenditures in Nevada to fall.

But Guinn and Human Resources Department officials told lawmakers Tuesday caseloads may be up enough to cost the state $30 million more than the $311 million budgeted over the coming two years.

The other piece of the puzzle is the proposal to pay University Medical Center in Las Vegas $23 million to settle a lawsuit in which UMC claims it has been underpaid for Medicaid services since 1996. Together, that's a total $53 million more than what's in the proposed budget.

Budget Director Perry Comeaux said in January the state has consistently put more money into Medicaid than actually needed.

"We've not been really good at forecasting those Medicaid payments," he said. "They've been significantly over-budgeted in recent years."

With caseloads declining for three years, the surplus had risen to more than $100 million, so Guinn decided to cut the Medicaid budget to match that spending pattern.

Lawmakers expressed some concern in January, saying if caseloads increased instead of declined, the state would have to increase its $311 million share of the $1.3 billion Medicaid budget for the coming two years.

Apparently those caseloads began to do just that after the budget was put together.

"They were betting that Medicaid caseloads would continue to fall," said Assemblywoman Jan Evans, D-Sparks. "Apparently that hasn't happened."

But Comeaux said it's not time to panic. He said the truth is no one really knows if caseloads are up or down at this point.

Comeaux told lawmakers the budget office and HRD will come up with a new forecast by April 5 so both the governor and Legislature can see where caseloads are.

"The problem is in a $1.3 billion budget, $30 million is a relatively small fluctuation," he said.