Louisiana Hospital Association asks Jindal for budget explanation

The 140-member Louisiana Hospital Association has asked the Jindal administration for data it used to justify making more than $50 million in health care cuts, mostly in Medicaid — the government insurance program for the poor.

Department of Health and Hospitals officials announced the cuts last week, stating that without the action the agency would run a shortfall at current operating levels in the fiscal year beginning next week.

“We have not seen the data to support them,” said Sean Prados, vice president of the Louisiana Hospital Association. “They are saying we are going to cut in advance. They are anticipating based on their historical data the (Medicaid) utilization will be higher.”

The administration is making assumptions based on historical data that may not be relevant, Prados said Wednesday.

Prados said the administration has implemented Bayou Health, the private insurance based managed care program that was supposed to curb Medicaid costs. The program covers two-thirds of the state’s Medicaid recipients.

In addition, he said the new budget reduces the number of people eligible under Medicaid. While other hospital-based initiatives have also cut costs, he said.

The budget reductions total $51.7 million — $25.9 million in state funds and the remaining federal dollars that support Medicaid. The program serves a little over 1 million Louisiana residents.

The hospital association asked for detailed Medicaid enrollment and utilization data, which measures the extent and what kind of services are being used, including the Bayou Health experience.

DHH Secretary Kathy Kliebert said the agency has confidence in the projections used to determine that cuts were required. The utilization projection came from DHH “looking at the last couple of months of experience which gives the best idea,” Kliebert said.

“If we did not have Bayou Health, our utilization would have been much higher,” Kliebert said. “It’s helped managed care.”

She said the agency is projecting a 2.8 percent utilization increase which is “pretty small compared to the national average” and lower than it was prior to Bayou Health. The budget appropriated no dollars to cover the cost.

DHH could not provide information on utilization rates of prior years on Wednesday. Spokeswoman Olivia Watkins said the agency’s chief economist who had the information was out of the office.

However, Watkins pointed to a DHH 2011 Annual Report which reported that 1.3 million people, about 30 percent of Louisiana’s population of 4.5 million, were enrolled and payments were made on behalf of 1.3 million recipients in the Medicaid program. According to the report, “From a historical perspective, this was about 2.8 percent increase in enrollees and about 2.4 percent increase in recipients compared to the previous” fiscal year.

Various health care provider groups have been pushing DHH to release reports showing the progress of Bayou Health and what is happening with health care access since its inception.

The Legislature on two separate occasions approved legislation that would have required the reporting. But Gov. Bobby Jindal vetoed the measures. The 2013 Legislature sent the transparency measure to Jindal’s desk again and he signed it.

Kliebert said there are still many Medicaid recipients who are not covered by a Bayou Health plan including those in nursing homes and some developmentally disabled that are still covered on a Medicaid “fee for service” basis.

Some people may be leaving Medicaid, Kliebert said. But others will be coming in as they seek medical coverage through new federal Affordable Care Act insurance exchanges and find out they are instead eligible for Medicaid, she said.

Under the new budget, Louisiana community hospitals would be subject to cutbacks in a program that has been used in recent years to help offset reductions in the traditional Medicaid program.

Kliebert said private hospitals which have taken over operation of LSU public hospitals will not get hit by any reduction. “They are protected because of the agreements. There may be an increase but not a decrease,” she said.

Prados said DHH officials have said they will work with community hospitals throughout the year if they can identify other sources of funding.