Amendment eyed to limit budget cuts

The home-based health care services couldn’t beat the hospitals and nursing homes, so they chose to join them in seeking constitutional protection from budget cuts.

In 2013, the Louisiana Legislature approved and sent to voters two proposed constitutional amendments: One aimed at protecting and improving Medicaid funding for hospitals; the other for nursing homes and intermediate care facilities. Both propositions go to voters for approval in the fall.

Now, a coalition of advocates for the elderly, developmentally disabled and mentally ill seek another constitutional amendment to be added to the Nov. 4 ballot.

This one would protect home- and community-based services as well as similar health care programs, such as hospice care.

If all three initiatives are approved by the voters, then only higher education would be available for budget cuts by legislators.

Supporters fear the home-based services would become more exposed to the budget ax should voters approve the hospital and nursing home proposals.

“Really, there’s no other alternative but to seek this. It puts the services on the same level field as other constitutional amendments as far as programs being cut or not,” said Kay Marcel, chairwoman of the Louisiana Developmental Disabilities Council.

“The advice we got when we talked to legislators was that we would not be successful in going for repeal” of the constitutional amendments on state spending for nursing homes and hospitals, Marcel said. Instead, the legislators said, “ ‘You need to get your own constitutional amendment.’ That’s what we are doing or trying to do.”

Public Affairs Research Council President Robert Travis Scott said the new proposal suffers from the same problem as the other two.

“Putting it in the constitution limits the options of the Legislature when it comes time to budget,” Scott said.

Today, health care and higher education are the only major areas of the budget that are unprotected in times of financial stress.

“Under the three amendments together, you have all health care providers protected in the constitution,” Scott said, “Obviously it squeezes out higher education more than ever before.”

State Sen. Fred Mills, R-New Iberia, is sponsoring the proposal, Senate Bill 355. In order to get to voters, the proposition needs a two-thirds vote for approval: 26 of 39 senators and 70 of 105 representatives. SB355 has been assigned to the Senate Finance Committee but has not been scheduled for a hearing.

The proposed constitutional amendment in SB355 would set a floor at the average Medicaid reimbursement rates established for fiscal year 2013-14 for services delivered.

The rate could be adjusted annually for inflation or rebasing but the adjustments could never be negative.

In the event of budget cuts, the reduction could not exceed that of other Medicaid providers and the Legislature would have to approve the reductions either by a two-thirds written vote, if it is in session, or a favorable vote of two-thirds of the Joint Legislative Committee on the Budget, if the Legislature is not in session.

AARP Louisiana lobbyist Andrew Muhl said the propositions already on the ballot “exclude some essential services … that deserve the same protection” as hospitals and nursing homes. Without passage of the coalition’s proposed constitutional amendment, Muhl said, “a lot of other vulnerable populations would be at greater risk because they are left unprotected.”

Louisiana Nursing Home Association Executive Director Joe Donchess said the new groups are seeking budget stabilization without putting up funds to help generate additional federal Medicaid dollars.

Nursing homes, hospitals, intermediate care facilities and pharmacies would put up dollars, such as “bed taxes” in the case of nursing homes, and “special assessments” in the case of hospitals, which would be used as a state match to attract Medicaid money from the federal government, thereby generating more money for the programs.

But the home-based services don’t have those kinds of funding sources that could be used to draw federal Medicaid money, he said. “They would just be taking from the state general fund at the expense of other programs,” Donchess said.

The proposed constitutional amendments set to go before voters in November would:

Provide protections for existing “bed taxes” and other fees paid by nursing homes, intermediate care facilities and pharmacies. It would keep separate accounts for each entity within a special fund. The proposition would establish a Medicaid rate floor that cannot be reduced and provides for an inflation factor.

The constitutional amendment also would provide protections in times of budget strife, with a supermajority required to cut the base rate and the cut could not exceed the average for other Medicaid program providers.

Create the Hospital Stabilization Fund with the hospitals able to impose upon themselves a special assessment. The hospital dollars set aside from operational revenues would be used to attract federal funds to enhance the Medicaid dollars they receive for patient care.

An assessment distribution formula would be approved annually by the Legislature.

A rate floor also would be established as well as a potential inflationary factor in which the base rate would go up every year. The constitutional protection from budget cuts would be the same as in the nursing home proposition.