ASHLAND — A change in the way Kentucky allocates funds for local health departments will have a mixed impact on those in the area.

The Little Sandy Health Department, which serves Carter and Elliott counties, will see an increase in its state funding, while the Ashland-Boyd County and Greenup County Health Departments will both see their funds decrease.

All three departments are expecting an overall drop in their bottom lines and are taking steps to tighten their belts.

The formula the Cabinet for Health and Family Services, which oversees public health, now takes into account the percentage of populations below the poverty level and how well populations are served by other health resources.  

The state formula also does not penalize departments that have higher local taxation rates; the minimum taxing rate for county health departments is 1.8 percent.

Kentucky also moved to state-managed Medicaid care last year, which has dramatically reduced the reimbursement rates for health departments. They now also have to send more than 30 cents of every dollar received back to the state’s Department of Public Health, putting an additional crunch on the dollars available for public health programs and services.

LITTLE SANDY HEALTH DISTRICT

Lloyd Miller, public health administrator for the Little Sandy Health Department, said his agency is expecting to receive an increase in funds from the state but is expecting an overall loss in funding of around $100,000 to $200,000 in its expected $2 million annual budget. Most of the decrease will come from lower reimbursement rates and depressed tax revenues, he said.

“The state government tells me that I got an increase in my funding, but they haven’t been able to tell me how much and where I can find that money,” he said last week. “With the distribution based on need, we should be getting a little more than we normally will have expected and then a little bit more next year, but we’re still wading through this thing and figuring out what is what.”

For the first time in his 22 years as administrator, Miller said, the state is requiring him to submit a reorganization plan in the event he needs to lay off staff. Miller said layoffs are not imminent but furloughs may be in the future for his 38 employees.

“My board has expressed firmly to me that they want to try furloughs before laying people off or adjusting salaries,” he said.

Miller also stressed the department has no plans to shutter any of its three health centers in Grayson, Olive Hill and Sandy Hook. “We will do everything in our power to keep the three health centers open,” he said. The fate of its five school clinics are not as certain.

Residents in Carter and Elliott County pay a 3 percent health department tax rate.

GREENUP COUNTY HEALTH DEPARTMENT

Greenup County will see a decrease in its state funding of about $5,000 due to the change in allocation formula, said its administrator, Chris Crum.  Greenup will get approximately $800,000 in state funds, he said.

However, the department is expected a total loss of about $40,000 to $50,000 in funds compared to the current fiscal year based on changes in medicaid reimbursement allocations and cuts in other programs.

Although his agency will suffer from the changes, Crum said he believes the state’s new formula is a better way of divvying up the state money.

 “I believe it is a more fair and balanced way to distribute the money,” he said, noting he particularly likes that counties are not penalized in the process for having a higher tax rate. “That helped to balance it out. If your county wants to provide more services they can change their tax rates.”

Greenup has a 4 percent tax rate for its health department.

Crum said his agency will focus on reducing duplication of services between it and local hospitals and other health providers, in order to provide funding for health needs that are not being met in the county.

“Our focus here is to become the educational source for the community. As people ask questions we want to get them the answers they need,” said Crum.

ASHLAND-BOYD COUNTY HEALTH DEPARTMENT

The Ashland-Boyd County Health Department loss in funding is considerably more dramatic than its neighbors and has suffered considerably as medicaid reimbursement rates have dropped.

Public Health Administrator Maria Hardy said the agency has been told it will receive $285,000 less in state funding due to the new formula. But that will account for only part of the reason the agency’s annual budget is expected to drop from $3 million in 2011-2012 to just more than $2.1 million in the coming year. Of those funds, approximately $1.42 million will come from the state, down from $1.68 million last year.

The Ashland-Boyd County Health Department has been hit particularly hard by a new medicaid matching policy that began in July 2010, according to Hardy. In 2010, the state began requiring health departments to send it 20 percent of the funds it received in medicaid reimbursements in addition to paying a 1.25 percent administrative fee. The current “match” rate is now 28.82 percent in addition to the administrative fee, she said.

Despite a 2-percent jump in the agencies local tax rate — from 4 cents per 100,000 dollars of valuation to 6 cents — the agency continues to struggle financially.

Over the last 12 months, the agency has shed 14 jobs, through layoffs, retirements and other attrition. The biggest loss has been its school nursing program, said Hardy. The health department had registered nurses in each Ashland school along with one each in the Boyd County and Fairview school districts.  That program has now been eliminated, some of the nurses have found other jobs outside the agency and the remainder will work at the health departments clinic.

Hardy said she does not anticipate losing any additional jobs but will have no money for services beyond those mandated by the state. Mandated services include its environmental department, which is responsible for inspecting restaurants, hotels, motels, swimming pools and other food services; along with breast and cervical cancer, family planning, STD screening, Women Infant and Children, and tuberculosis programs.

“We may have to limit the number of services we provide in each program,” said Hardy. “The money only goes so far.”