Hospital funding mechanism approved by Louisiana House

Advocate staff photo by RICHARD ALAN HANNON -- State Rep. Barbara Norton, D-Shreveport, talks with Louisiana House Speaker Chuck Kleckley, RLake Charles, as Kleckley tries to advance his bill, House Bill 532, on the House floor Tuesday, May 7, 2013, at the Louisiana State Capitol in Baton Rouge.
Advocate staff photo by RICHARD ALAN HANNON -- State Rep. Barbara Norton, D-Shreveport, talks with Louisiana House Speaker Chuck Kleckley, RLake Charles, as Kleckley tries to advance his bill, House Bill 532, on the House floor Tuesday, May 7, 2013, at the Louisiana State Capitol in Baton Rouge.

The Louisiana House on Tuesday endorsed a proposed constitutional amendment aimed at generating more Medicaid dollars for community hospitals.

The House voted 99-6 for the measure, which would allow hospitals to put up dollars that would then be used to draw down federal funds for care they deliver to the poor.

House Speaker Chuck Kleckley, sponsor of the proposition, said hospitals have suffered a $260 million decrease in funding in recent years.

The measure would allow the hospitals to “pull down more dollars from the federal government to help with the cuts they have sustained over the last several years,” said Kleckley, R-Lake Charles. He said the hospitals could attract 60 cents in federal funds for every 40 cents they put up.

House Bill 532 creates the Hospital Stabilization Fund into which the hospital assessment would flow. Proponents said the hospital assessment would come from general operating revenues of the facilities. That is not spelled out in the proposed constitutional change.

The money in the fund would be used to enhance Medicaid payments to hospitals through a formula that would have to be approved annually by a two-thirds vote of the Legislature initially and by a majority vote thereafter.

Thirty-nine other states have similar programs in place, Kleckley said.

HB532 now moves to the state Senate, where two-thirds approval is required. The proposition would not go to voters until the next statewide election in 2014.

Kleckley said the legislation sets up the framework and parameters of the stabilization fund but details will be filled in by the Legislature if voters approve, including a formula for distribution of the dollars collected.

State Rep. Sam Jones said the proposed fund is similar to one established in state law that has “worked out well” for nursing homes. A “bed tax” is the source of funding.

Jones, D-Franklin, noted that the hospitals passed a “bed tax” in 2005, which was never implemented.

“Hurricane Katrina came and everything was in disarray” so the law was scrapped, Kleckley said.

The Louisiana House amended the measure to require federal Centers for Medicare and Medicaid Services approval prior to its implementation as well as a trigger for the return of contributions.

The House also approved 95-6 House Bill 533 by Kleckley, which would place the Medical Assistance Trust Fund in the state constitution. Nursing homes, intermediate care facilities and pharmacists assessments go into the fund.

Under the proposition, the dollars each group contributes would be segregated for their use.

“This will protect it in the constitution,” said House Speaker Pro Tem Walt Leger III, D-New Orleans, a co-sponsor.