Late this afternoon, the Louisiana Department of Health and Hospitals announced how it would cut the state health system and Medicaid by $859 million.
Nearly a third of those cuts will fall on the public health care system run by LSU and doctors say it will be hard to keep treating medicaid patients with this new round of cuts.
A young couple depends on Medicaid for their newborn's doctor visits.
"It means a lot to me that I get Medicaid because it's a lot of help and provides everything he needs," said Chasity Andrews, 20. "I appreciate it a lot."
Nearly 85 percent of pediatrician Dr. Floyd Buras' patients have Medicaid. But now, with yet another round of state Medicaid reimbursement cuts, he doesn't know how much longer he can stay in business.
"I normally have four nurses giving shots but to save money I told two of them not to come in today, which means the patients are now sitting there cued up waiting more than an hour for the nurse that's here to draw up their medicine," said Dr. Buras who is also the past president of the Louisiana State Medical Society.
The state says there are no plans to close hospitals, but this has to be done.
"The action taken by Congress created an issue with Medicaid and the effect is strictly an issue for the Department of Health and Hospitals, said Paul Rainwater, Commissioner of Administration for Governor Bobby Jindal.
"A new LSU health system must emerge from this. It is an opportunity for reform and to modernize, to bring the system up to greater effeciency and sustainability for the future," said Bruce Greenstein the secretary of the Louisiana Department pf Health & Hospitals.
"So I think in terms of patient volume, LSU is going to be overwhelmed because there's going to be all these people with no insurance that the LSU Hospital system is the only place it can go," said Dr. Buras.
Some doctors believe this is going to put tremendous stress on the health care system. Fewer doctors will practice and they'll be far fewer specialists because it will actually cost more to see a patient then they are going to get paid for their services. They also think hospitals won't want to take Medicaid patients, so that will put tremendous pressure on many patients coming to a public hospital. And how will that affect cost because now people may choose to come to the emergency room for something minor, which costs so much more money than going to a primary care doctor.
"Medicine is the only profession in the world where we don't get to set our prices. The government sets our prices for us and so it doesn't matter what it costs to provide care, because we're told how much we can charge for the care," said Dr. Buras. "By the stroke of a pen, they can take hundreds of thousands of dollars away from providers and they do it because they can.
The Southeast Louisiana State Hospital for mentally ill patients will close in Mandeville. The Louisiana Hospital Association says the cuts to rural hospitals will lead to fewer services and possible closures.
- Office of Public Health ($383,333 SGF; 12 TO). The closure of eight Vital Records Service Centers across the state will continue OPH's move to a more modernized method of issuing certified copies of Louisiana birth certificates, birth cards, death certificates and Orleans Parish marriage certificates. Residents will continue to have access to certified copies of vital events at the Vital Records Central Office in New Orleans and through the more than 30 Clerks of Court across the state who currently offer this service, as well as through the mail, fax and online. OPH is also piloting a kiosk solution, and is planning to install them at large parish health unit locations throughout the state to provide better access for the public when ordering certified copies of vital event documents. Additionally, DHH is streamlining its regional engineering staff, resulting in the reduction of two positions
- Office of Behavioral Health ($555,893 SGF; $1.6 million total; 300 TO). DHH has outlined a plan to achieve savings in FY 13 while maintaining services through a realignment and redistribution of mental health inpatient bed capacity across the state. Beginning October 1, the Southeast Louisiana State Hospital (SELH) campus in Mandeville will be phasing down operations as patient bed capacity is moved to three locations. Thirty-four intermediate beds and 15 acute beds will move to East Louisiana Mental Health System; 60 intermediate beds will move to Central Louisiana State Hospital (CLSH); and 17 adult acute beds and 50 child/youth beds will be relocated to private hospitals in the New Orleans area.
- Office of Aging and Adult Services ($350,000 SGF). DHH will reduce $100,000 in newly added funds from the State Personal Assistance Program, enabling the Department to maintain its current level of services. However, this will prevent DHH from adding approximately 10 additional persons from the waiting list to the program. Further, DHH will delay the phase-in of 350 of the new Community Choice Waiver slots. The remaining 150 new slots will be phased-in once CMS approves a waiver amendment, which is currently being prepared for submission.
- Office for Citizens with Developmental Disabilities ($696,719 SGF; 9 TO). DHH will enact means-testing requirements for the Flexible Family Funds program, which provides stipends to families of children with disabilities for expenses related to the child's disability. Families of waiver recipients whose income is more than 650 percent of the federal poverty level will be excluded from the program. OCDD also will eliminate nine positions from their resource centers, primarily in the northern part of the state. The locations for the cuts were selected because most referrals come from Southeast Louisiana and there is no waiting list for services in the northern part of the state.
- Medicaid Administration ($1.25 million SGF, $2.5 million total). Medicaid will achieve savings through changes to four existing contracts, none of which will have an impact on recipients. First, DHH will not award a $250,000 contract for a community-based ombudsman for Bayou Health. Rather than executing an additional contract, we will use existing Medicaid staff and contractors to perform the ombudsman function. Second, DHH will eliminate the contract that provided prior-authorization services for the Medicaid dental benefits. The contract is no longer needed as DHH is moving forward with plans to carve dental services into BAYOU HEALTH, where the health plans will become responsible for delivering dental services to Medicaid members in their networks. Third, since the implementation of Bayou Health fully, DHH staff has identified efficiencies in the Maximus contact related to reduced postage needs and administrative costs that will lead to a $1 million savings. Maximus will continue operating the Bayou Health Enrollment Center to provide information to potential enrollees and help enrollees change plans or enroll in a new plan. Last, DHH will reduce administrative fees to Molina by $1,080,000 for processing the monthly payments to Bayou Health Plans.
- Medicaid Provider Payments ($190.5 million SGF; $518.4 million total).
DHH anticipates realizing $1.5 million in State General Fund savings to the Medicaid program by implementing a 5 percent SGF reduction in payments through the Greater New Orleans Community Health Connection (GNOCHC), a successful Medicaid pilot program that expands health care coverage to uninsured adults in the New Orleans area, which was created after Hurricane Katrina.
- DHH will strengthen its nationally recognized Medicaid eligibility processes to better ensure services are being provided to those who legitimately meet the criteria. Medicaid will begin doing second-level reviews after a person applies for Medicaid prior to making a final decision. (Currently, there is only a first-level review, followed by the decision of whether a person qualifies for Medicaid or not). This addition to the process will increase accuracy of eligibility decisions, change will not impact an eligible individual's ability to qualify for and receive Medicaid.
- DHH will use better money management to shift claims payments and generate savings by taking advantage of the higher matching rate in place until Oct. 1.
- The optional Take Charge Medicaid waiver program that provides Family Planning services to low-income women between the ages of 19-44 will have its qualifying income limit reduced from 200 percent to 133 percent of the Federal Poverty Level. DHH anticipates this change in income qualifications would affect fewer than 5,000 women, and those women should still be able to receive services for less than $20 through alternate programs.
- DHH will reduce Disproportionate Share Hospital (DSH) funding paid to the LSU system by $122 million in FY 2013. Medicaid will continue making DSH payments to LSU hospitals, but will do so at a reduced level. DHH will also reduce the public hospital Medicaid reimbursement rates paid to the hospitals in the LSU Health System by 10 percent. While DHH did not initially reduce public hospital rates in SFY13, most private provider rates were reduced. Even after this reduction, LSU hospital rates are higher than private hospital rates. Together, this represents a 24 percent reduction to LSU Health System's overall SFY13 budget. DHH does not anticipate this reduction of DSH and Medicaid payments to affect Medicaid recipients' access to hospital care
- Effective August 1, 2012, DHH will reduce emergency medical transportation provider rates by 5 percent for SFY 2013. Emergency medical transportation providers offer a valuable service to Medicaid recipients, and staff will continue work with these providers to ensure recipients have continued access to their services.
Effective August 1, 2012, DHH will also enact a 3.7 percent rate reduction in the Medicaid claims paid for inpatient and outpatient services provided by private hospitals. Private hospitals had been excluded from the recently announced 3.7 percent across-the-board Medicaid provider rate reductions for SFY 2013.
- DHH will eliminate separate Disproportionate Share Hospital (DSH) funding payments to rural hospitals. Rural Hospitals will continue to receive Medicaid claim payments at 110 percent of cost as required by the Rural Hospital Preservation Act. DSH is the largest discretionary program Medicaid funds in Louisiana. As with the reduction of DSH payments to LSU hospitals, DHH does not anticipate that eliminating DSH payments to rural hospitals will impact Medicaid recipients' access to care.
- DHH will reduce the Medicaid reimbursement rate paid to nursing homes by 11 percent in FY13, for a total savings of approximately $23.2 million dollars. Because of backfill statutorily dedicated trust fund monies, access to nursing home care will not be affected by this reduction, and DHH does not anticipate any interruption in services for Medicaid recipients currently in nursing home care.
- DHH will realign payments to the two Bayou Health Shared Savings Health Plans by enacting a 10 percent reduction to the per-member per-month care management fee these plans receive to coordinate primary care services for their members. An analysis conducted by DHH's actuary shows that the per-member per-month rates for these can be lowered and still remain within actuarial limits as there are more members enrolled per plan than predicted in the original estimates used to set the initial rates.
- The Louisiana Department of Health and Hospitals strives to protect and promote health statewide and to ensure access to medical, preventive and rehabilitative services for all state citizens.
Statement from LHA President & CEO John Matessino
Today Department of Health and Hospitals Secretary Bruce Greenstein announced the Jindal Administration’s strategy to deal with the $859 million in cuts to the Medicaid program, as a result of a recent congressional action relative to the Transportation Bill, which dealt a huge blow to health services in our state.
The DSH cuts to rural hospitals will be critical and will lead to reductions in services and possible hospital closures. This could leave gaps in healthcare delivery for patients in rural areas, as well as economic losses to those communities.
We are also disappointed that another 3.7 percent cut to non-state, non-rural community hospitals was made, which is on top of a 20 percent Medicaid reduction that hospitals have faced over the past several years.
As for the DSH reductions to the state’s charity hospital system, the LHA has had a long-standing policy calling for the elimination of duplicative services in the state run hospital system and for the consolidation of higher cost inpatient services, while maintaining outpatient primary care services. Changes to the charity system need to be considered both locally and regionally to see how it can be transformed to coordinate with other community hospitals and serve the population’s needs.
We realize that the Administration had to make tough decisions. Our community hospitals have had to make these same decisions over and over again for the past few years. Our healthcare system is lean, and we anticipate the loss of services as a result of these additional reductions.
Hospitals in Louisiana will continue to do what they have always done – care for patients. We will continue to develop strategies, efficiencies and solutions that will improve Louisiana healthcare.