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Massive Medicaid Cuts Hit Charity Hospitals, Health Programs Across Louisiana
As the rest of the country prepares for an expansion of Medicaid as a result of the Affordable Care Act, Louisiana on Friday announced massive cuts in the health program that provides a safety net for 1.2 million low-income people in Louisiana. The $859 million loss in Medicaid reimbursement money from the feds will result in state budget cuts that range from closing a hospital in Mandeville and vital records offices to cutting a quarter of the budget of the LSU department that runs the Charity Hospital system. The cuts come because the federal government is taking back money that was mistakenly paid to Louisiana as a result of the federal health care law.
During the debate over Barack Obama's much-yelled-about health care reform law, Mary Landrieu negotiated to put a provision into the bill - known in the Beltway as the Louisiana Purchase - that gave Louisiana additional $200 million in Medicaid money. By the time Obama signed the health care bill, Louisiana was getting an additional $4 billion in Medicaid money.
The feds later said the extra money was a mistake that was made during the drafting of the health care bill. The mistake was later corrected, but Congress initially indicated they would leave the Medicaid money in place through 2013.
But when Congress was looking for ways to fund the Transportation Bill that Obama signed last week, the pledge to keep giving Louisiana the additional money was reneged. Congress agreed to provide money to restore the disappearing Louisiana coast from BP fines (via the Restore Act), as well as new money for highway projects. But in Medicaid, the state is taking an $859 million hit as a result of the reduction in payments.
Reductions in Medicare provider payments around the state amount to about $518 million, while the state's general fund will take a $287 million hit. Federal matching money the state planned to receive based on what the feds told them accounts for the rest of the loss.
As a result, state Administration Commissioner Paul Rainwater and Department of Health and Hospitals Secretary Bruce Greenstein announced $193 million in cuts to the state's general fund Friday. The officials said they think they can make up the rest of the $287 million from revenue the state took in during 2012. If they don't make up the money by later this summer, however, there could be more cuts.
The funding cuts announced as a result of the Medicaid mess will result in closings, consolidations and large budget reductions in public and private hospitals, nursing homes, and more.
The largest cuts come to the LSU Health System, which will face $329 million in total cuts. That's about a quarter of the funding for the entity that runs the state's Charity Hospitals and clinics, among other public programs. About two-thirds of the total Medicaid cuts - or $329 million - will hit LSU Health, Greenstein said. The officials did not detail what the cuts will mean for the Charity Hospitals and clinics, only saying the reductions would not affect "access to care."
Other facilities found out they would close. The Southeast Louisiana State Hospital in Mandeville, which treats people with mental illnesses, will shutter and split about 200 beds to other hospitals around the state. Eight vital records around the state will also close, with the New Orleans location remaining open and the issuing of the records falling to 30 Clerks of Court.
Nursing homes will lose $23.2 million as a result of the cuts, with the state cutting their Medicaid reimbursement rate by 10 percent. Greenstein said that there would be no "interruption of services" for people currently in nursing homes. In New Orleans, a post-K Medicaid pilot program known as the Greater New Orleans Community Health Connection, which was designed to expand health care the to the uninsured, will see a $1.5 million redction in Medicaid payments. Also seeing a 5 percent cut will be EMT providers.
Other areas seeing changes include a fund that provides resources to families with developmentally disabled children, and a state-run program that provides personal assistance for people with disabilities.
With each cut, officials said the loss of money would not impact "access to care" or "essential services."
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