DHH chief says budget delays mean cuts

• By MARSHA SHULER
• Advocate Capitol News Bureau
• Published: Oct 8, 2008 - Page: 14A - UPDATED: 12:05 a.m.

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Louisiana’s health chief warned lawmakers Tuesday that further delays in deficit reduction efforts could trigger deeper cuts in the program that pays hospitals, physicians and others for care of the poor.

State Department of Health and Hospitals Secretary Alan Levine for a third time made his case to a legislative budget panel that $81 million in spending cutbacks are required to avoid red ink.

Levine’s plea didn’t move lawmakers. They continued to question the need for cuts now, saying there is a projected but not a real deficit.

Others noted that $81 million is a small amount when you are talking about a $7 billion-plus Medicaid budget.

“That’s the part that puzzles me when you have $81 million we’re squabbling over,” said state Rep. Tom McVea, R-St. Francisville, chairman of the House Appropriations panel’s subcommittee on health.

“I want to see that it is truly there rather than a verbal projection,” said House Appropriations Committee Chairman Rep. Jim Fannin, D-Jonesboro.

Levine said he is obligated under state law to notify them of a projected deficit and submit a corrective action plan.

Levine said he acted as early as he did to prevent cuts that could reduce hospital, physician and other reimbursement rates.

“If I had waited, I would have had to recommend additional reductions,” Levine said. Now, he said, “I have my staff preparing what those will be because we are contemplating you won’t act until the end of November.”

Meanwhile, the DHH deficit reduction plan attracted more opposition as representatives of rural hospitals, hospice groups and physicians joined the Louisiana Hospital Association to spell out how it would hurt them as well as the patients who rely on them.

LHA executive vice president Paul Salles and Louisiana Maternal and Child Health Coalition director Sandra Adams suggested that savings from changes Levine proposed be used to increase rates hospitals and physicians get for care of the poor.

Salles said hospitals are not opposed to updating the clinical criteria used to determine patient length of stays or whether hospitalization is needed. “But we favor using the savings to close some of the gap in the system that is chronically underfunded,” Salles said.

Levine estimates that the updating would save $16 million in the current fiscal year, which ends June 30, $13 million of it related to hospital billings. If annualized, the amount would be $54 million.