Administration says Medicaid decision won’t impact budget

There will be no impact on the state budget now or in the coming fiscal year as a result of a federal agency’s decision to withhold $307 million in Medicaid payments related to LSU hospital privatization deals, the Jindal administration’s money manager said Friday.

Commissioner of Administration Kristy Nichols said the state will receive the Medicaid dollars while the federal Centers for Medicare and Medicaid Services decides whether it will approve key financial arrangements with the private hospitals. Even if there is an unexpected adverse decision, Nichols said the dollars would keep flowing while the state exhausts its appeal rights.

Nichols said the state would have to repay the disallowed federal expenditures if it is unsuccessful at the end of that lengthy appeals process.

The administration anticipates CMS approval of what are called “state plan amendments,” which, among other things, transfer from LSU’s public hospitals to private operators the ability to receive 100 percent funding for the care of uninsured patients, Nichols said.

“They have not finished their analysis ... clearly they are still deliberating,” Nichols said. “We have gotten a lot of positive feedback from them about the (public-private) model.”

The plans impact six of the privatized LSU hospitals, including those in New Orleans, Lafayette and Houma, as well as separate hospitals operated by two of the private partners.

Two of the three plans involve the federal funds hospitals are paid for “uncompensated care,” the term for medical services provided to patients who cannot pay.

State health officials have said they need more time to answer “complex questions” raised by CMS in its review.

CMS notified the state on Monday that it is deferring $307 million in claims filed for reimbursement in the last quarter of 2013, pending a decision on Medicaid changes impacting the private partner hospitals.

CMS Associate Regional Administrator Bill Brooks advised state Medicaid officials that the $307 million figure would increase because new claims submitted for federal reimbursement also would be deferred.

Brooks said the state has 60 days to submit “further documentation to support the expenditures deferred in order to avoid a possible disallowance.” If more time than that is required, Brooks said the state could avail itself of another 60-day extension.

The $307 million in question represent claims the state made for care delivered to patients with no insurance or ability to pay. The claims payments reflected the reimbursement level included in the public-private partnership contracts.

Those reimbursement levels have not yet been approved by CMS.