Executives detail health budget cuts

Louisiana’s health agency executives on Monday outlined $157.7 million in spending cuts prompted by new state revenue projections that came up short of what the Jindal administration proposed to spend in the new budget year.

The proposed budget balancing steps discussed by state Department of Health and Hospitals officials include:

• Additional cuts in Medicaid payments to physicians, hospitals and other health care providers. The initial budget included 2 percent reductions. The new round adds an average 1.7 percent cut.
• Another round of layoffs impacting more than 200 employees.
• Reductions in community-based services for the developmentally disabled as entrance into one of the key programs is shut down.

“We are committed to laying out a balanced budget that protects critical services,” said DHH Secretary Bruce Greenstein.

A proposed more than $25 billion budget for the fiscal year that begins July 1 approved by the Louisiana House Appropriations Committee requires the cuts to DHH’s $8.9 billion budget originally submitted by Gov. Bobby Jindal. DHH’s current year budget is $8.27 billion.

Meanwhile, Greenstein said LSU hospitals would get a $21.5 million cut in state revenues as part of budget-balancing efforts. LSU hospital dollars generally flow through DHH.

LSU System health care chief Fred Cerise said the $21.5 million cut would have a disastrous impact on the public hospitals because the money is used to attract many times that in federal funds.

Cerise said, the $21.5 million represents one-third of the state money in the proposed budget for the seven south Louisiana hospitals in LSU’s Health Care Services Division, called HCSD.

Services would have to be eliminated and the potential closure of some hospitals would be considered, he said.

“We have taken significant reductions this year already. To put another $21 million on top of that, there’s no question it’s going to cut services,” said Cerise. “We would have to give serious consideration whether we could keep everybody open at that level of cut.”

HCSD hospitals are in Baton Rouge, Lafayette, Houma, New Orleans, Bogalusa, Independence and Lake Charles.

Most of the DHH cuts would occur in Medicaid — the government’s health insurance program for the poor.

DHH Undersecretary Jerry Phillips said $103.5 million would be excised from Medicaid with the yanking of $29.6 million in state dollars that would have been used to drawn down federal funds.

Phillips said Medicaid providers would receive a reduced reimbursement for the services they deliver. “It’s not going to be across-the-board. Individual providers will be cut anywhere from 2 percent to 3.7 percent or 4 percent,” said Phillips.

Exempted from the new round of cuts are primary care providers who are essential to the operation of the state’s Bayou Health program, a private insurance-based health care network, he said.

DHH Deputy Secretary Kathy Kliebert said a freeze on new enrollees would be imposed on the New Opportunity Waiver program, which provides community services to the developmentally disabled. That means that 14 slots that become vacant each month because of people moving, dying or changing circumstances will not be filled for a $4.3 million savings.

Some 8,200 people receive services through the program today, Kliebert said. Another 8,800 are on a waiting list, about half of them getting some services through other DHH programs, she said.

Other cuts will involve the consolidation of some offices and streamlining the activities of others, DHH officials said.