Lawmakers in the Idaho Capitol are one step closer to heading home after the Senate passed a bill that would reduce state Medicaid spending by $34.6 million in fiscal year 2012.

The legislation passed the Senate 27-8.  Sen. Joe Stegner, R-Lewiston, was the only Republican to join with all seven Senate Democrats in voting against the bill.

The measure, formally House Bill 260, is one piece of legislation that is critical to finalizing budgets and closing shop in Boise. The measure, already passed by the Idaho House, now heads to Gov. Butch Otter for consideration.

The proposal, sponsored by Sen. Patti Anne Lodge, R-Huston, is the trimmed-down result of an earlier measure considered in the House.  An older version of the bill would have cut about $39 million in spending.

Due to the federal matching funds for Medicaid, overall spending for the health program will be reduced by about $100 million.

Lodge told senators that the changes in the bill will help move Idaho from a fee-for-service structure to more of a managed-care plan.  Her bill would mandate that the Idaho Department of Welfare study managed care options and see what Idaho could do to move even further in that direction.

Some of the savings will come by freezing automatic payment rate increases to some health service providers.  Other funds will be saved by cutting some non-emergency Medicaid dental funds, reducing allowable chiropractic visits each year from 24 to six, altering payment rates for prescription drugs, and eliminating audiology benefits altogether.