Gov. Haley Barbour has filed the notice of Medicaid budget cuts with the secretary of state's office.

Doing that notifies Medicaid providers of cuts that will take place, if a funding solution is not found for a $90 million shortfall. The cuts would take effect Aug. 6.

And all sides of this issue agree, if cuts are made, it would be devastating to health care statewide.

"There would be hospital closures. There would be layoffs of hospital personnel. There would be decreases or termination of service to Medicaid patients," said Dr. Michael Bailey, chief financial officer of the Mississippi Hospital Association.

Bailey doesn't mince words when asked what effect Medicaid cuts would have on the state. But he also believes the legislature will come through so cuts can be avoided.

"We have the highest confidence in the legislature that like years past, this year they will also take care of the financial needs of Medicaid," Bailey said.

Gov. Haley Barbour is not as trusting.

"We knew going in the fiscal year that we're going to have a $375 million deficit because the House has failed to do its job," said Barbour. "And because of that, I'm forced to do something that is bad for health care in Mississippi."

Whether or not there are cuts to the Medicaid budget is still in the hands of the governor and lawmakers at the state capitol. But one thing the threat of cuts has done is put hospitals and their employees in limbo.

Bailey said he's received call after call from hospitals statewide voicing concern over what's next.

"It's not fair to put the sick person, the hospital and the health care worker who's out there trying to take care of the sick persons in the middle of a political battle," said Bailey.

One lawmaker says progress is being made as more discussions take place.

"We are two bodies that are at least talking, and we talk about more things every time we meet than we were before," said Rep. Robert Johnson of Natchez. "So I think we're getting close."

The legislature is expected to return to resume the special session Aug. 4. That give lawmakers two days to find a funding source for medicaid to avoid the cuts going into effect.