Plan to reduce DHH spending put off

• By MARSHA SHULER
• Advocate Capitol News Bureau
• Published: Sep 27, 2008 - Page: 10A - UPDATED: 12:05 a.m.

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The Legislature’s top money panel deferred action Friday on a state health agency plan to reduce spending by $81 million to avoid a projected deficit.

Members of the Joint Legislative Committee on the Budget could not agree on how to proceed.

House Appropriations Committee chairman Rep. Jim Fannin said he wants time to determine whether state Department of Health and Hospitals’ deficit estimates are correct.

“There are a lot of questions here,” said Fannin, D-Jonesboro, who wanted a month’s delay.

Senators favored signing off on some of the recommendations for cutting spending in Medicaid — the government insurance program for the poor — noting that postponing action would only increase the size of reductions required.

Senators wouldn’t go along with Fannin, and state representatives refused to approve the cutbacks piecemeal.

State Department of Health and Hospitals Secretary Alan Levine presented the deficit reduction plan affecting spending in the program that pays hospitals, physicians and others for care they provide the poor.

Levine is required to bring a potential deficit to the panel’s attention as well as a corrective action plan for budget committee approval.

Levine said the $81 million shortfall involves current programming only. Extra spending because of hurricanes Gustav and Ike would be reported to the panel next month, he said.

The DHH plan includes foregoing $25 million to begin a pilot program to revamp the state’s health care delivery system for the poor. Levine said the program is not needed now.

Other proposals would have changed rural hospital financing methods, stopped duplicate or overpayments to hospitals, and reduced duplicate payments for hospice care delivered in nursing homes.

Sens. John Alario, D-Westwego, and Jack Donahue, R-Mandeville, complained that already financially struggling hospitals would be adversely affected by Levine’s plan.

“My concern is on the community hospitals,” Alario said. “They took a lot of uncompensated care patients. They picked up the slack and suffered financial problems because of it.”