Despite Budget Shortfall, Kansas Lawmakers Agree to Maintain State’s Senior Prescription Drug Program:

Despite the state's $185 million budget shortfall, Kansas legislators said they intend to maintain funding for a program to help low-income seniors pay for prescription drugs, the Topeka Capital-Journal reports. However, some of the funding allocated for the program may be redistributed to other programs. Funding for the drug program is collected from interest earned on a trust fund created with money obtained through the Medicaid "loophole" (McLean, Topeka Capital-Journal, 4/12). Under the loophole, states pay city- or county-owned care facilities more than the actual cost of health services, receive additional matching funds from HCFA and then require the facilities to return a portion the extra state funds. The state then sometimes pays the facilities a small fee for participating, and uses the extra federal funds for health and/or non-health-related items (Kaiser Daily Health Policy Report, 1/8). The loophole is expected to be closed by "late next year," but state officials are hoping to increase the fund by $160 million before that happens. The Capital-Journal reports that based on interest earned to date on the state's trust fund, about $1.2 million "is available to finance" the drug program (McLean, Topeka Capital-Journal, 4/12).