Budget shortfall hits hardest on Medicaid

• By MARSHA SHULER
• Advocate Capitol News Bureau
• Published: Dec 16, 2008 - Page: 7A - UPDATED: 12:05 a.m.

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Louisiana’s health agency is bracing for mid-year state funding cuts of about $100 million, the agency’s chief said Monday.

The cuts could range from $125 million up to $178 million, state Department of Health and Hospitals Secretary Alan Levine.

“I don’t have a definitive number yet,” Levine said.

The projected cut could balloon to the $500 million mark because state money is used to match three times as much in federal funds for Medicaid, the government insurance program for the poor and uninsured.

Levine said he will meet with Commissioner of Administration Angèle Davis to discuss  mid-year budget cuts prompted by a $341 million downturn in state revenue projections.

“The lion’s share (of cuts) is going to come out of the state’s $7 billion-plus Medicaid program,” said Levine.

The administration had advised agency heads to prepare for the state having $1.3 billion less during the next fiscal year that begins July 1, 2009. That number changed to $2 billion on Monday.

“For the last couple of weeks we have been trying to walk through what the different options are and preparing for the worse,” said Levine.

Levine said he wants to try to mitigate cuts in the reimbursement of physicians, hospitals, pharmacists and other health-care providers, but some will be necessary with the size reduction required.

He said he wants to protect pediatricians and family-practice physicians from cuts, so the state doesn’t lose more of them as Medicaid providers. “We have too big a problem with access today,” Levine said.

“The challenge I have is rather difficult. If I do any reductions related to Medicaid, it can take rule-making and state plan amendments, which take time,” Levine said.

Levine said across-the-board cuts can do “a lot of damage,” so he is looking for lower performing programs for possible elimination.

DHH has previously submitted to the administration ideas that would potentially save $40 million.