Committee delays action on cuts in DHH spending

• By MARSHA SHULER
• Advocate Capitol News Bureau
• Published: Oct 4, 2008 - Page: 10A - UPDATED: 12:05 a.m.

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The Legislature’s top money committee postponed action Friday for a second time on state health agency spending cuts after opposition mounted from hospitals which would lose money under the plan.

The Joint Legislative Committee on the Budget decided it wanted more information on the plan to eliminate a projected $81 million budget deficit in the Medicaid program that pays private hospitals, physicians and other providers for care of the poor.

Some lawmakers suggested the budget cuts were premature.

State Department of Health and Hospitals Secretary Alan Levine warned that delays in implementing reductions would only increase the size of the cutbacks.

If lawmakers don’t like what he proposed, Levine invited them to make other recommendations to solve the fiscal problem in the $4.6 billion program.

A House Appropriations Committee panel set a Tuesday meeting to continue discussions.

The DHH plan includes giving up $25 million to start a pilot program to restructure the state’s health-care delivery system for the poor. Other proposals would change rural hospital financing methods and reduce duplicate payments for hospice care delivered in nursing homes.

The hospital proposal drew the most opposition. It would require updated criteria to be used in determining hospital admission and how long a patient could stay drew the most opposition.

Levine said the change would cut spending by $13 million in the fiscal year that ends June 30, and eliminate $54 million in spending next budget year. He said the state is often paying for hospital stays and services that are not clinically indicated.

Legislators said they were concerned about the impact the change would have on community hospitals that are struggling financially. They said hospitals are seeing more uninsured patients in the aftermath of hurricanes.

“If you are going to take $54 million out of hospital funding (that’s) going to them, it’s got to hurt some place,” said state Sen. John Alario, D-Westwego. “If we lose those hospitals, we will have a heckuva problem.”

Louisiana Hospital Association president John Matessino said  hospitals don’t object to the new criteria “but to the dollars being removed.”

Matessino said Medicaid hospital reimbursement rates cover about 88 percent of costs.