Medicaid plan draws fire
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A state health agency proposal to scale back rates paid to Medicaid providers drew opposition Monday from nursing home and hospital interests.
State Department of Health and Hospitals Undersecretary Charles Castille said reducing the rates to the levels they were three years ago would lower spending by $232 million.
The program grew $1 billion in one year and now costs more than $6 billion.
State Treasurer John Kennedy, the chairman of a Commission on Streamlining Government advisory group, said cutting the budget across the board, such as this one, is not the way to go.
Kennedy asked DHH officials to instead consider prioritizing spending for Medicaid, the health insurance program for the poor.
“It doesn’t make sense to treat every Medicaid program the same,” Kennedy said.
Nursing home and hospital officials agreed the state needs to protect priority health care areas from cuts. Cuts in their areas would negatively affect patient care, they said.
The commission and its advisory groups are looking at ways to reduce government spending. Louisiana government is projecting a $1 billion shortfall in the fiscal year that begins July 1, 2010, and projecting a greater one in the following budget year.
DHH submitted the idea of rolling back Medicaid rates paid to providers of health-care services to the 2006-07 fiscal year level.
Late Monday, DHH spokesman J.T. Lane said it is not a department recommendation just an option for consideration.
Castille said the Medicaid program prior to Hurricane Katrina in August 2005 stood at $5.2 billion. During the 2007 legislative session, Castille said the program ballooned to $6.2 billion with increased payments to health-care providers. Last budget year, the insurance program hit $6.35 billion, he said.
Most of the growth was in the private provider program, which reimburses hospitals, physicians, nursing homes and others for care of the poor, Castille said. The groups got a higher level of reimbursement for care delivered, he said.
“Now that revenues are significantly less should we go back to that level,” Castille said.
Castille said there would not be a $1 billion savings because there has been increased use of services too.
The state is restrained in what it can do in health-care budget cuts because of strings attached to its receipt of federal stimulus dollars, Castille said.
“You cannot reduce eligibility requirements after July 1, 2008,” he said. “Absent stimulus funds you could cut back on eligibility. That is off the table now.”
Louisiana Nursing Home Association executive Joe Donchess said the rate reimbursement proposal would mean an $80 million to $100 million cut in the $700 million nursing home program.
“That’s something our industry could not sustain,” Donchess said. “We won’t have anywhere else to raise rates to offset.”
“Lack of money also means lack of quality of care,” he added.
Donchess suggested that other groups implement provider fees such as those adopted by the nursing homes years ago that helps not only nursing homes but other aspects of the Medicaid program.
He also suggested a rollback on some community care programs for the elderly and disabled, including moving personal care attendants into a waiver service category on which limits can be established on participation.
Louisiana Hospital Association vice president Sean Prados said a roll-back to 2006-07 rates would translate into about a $100 million reduction to private hospitals.
“Hospitals are going to have to make some very serious choices in their operations,” Prados said. “They are going to have to figure out what to do in their communities.”
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