July 17, 2012
Louisiana’s latest financial crisis officially doesn’t start until Oct. 1. That’s the beginning of the federal fiscal year, during which Louisiana will take a hefty cut in its Medicaid reimbursements for health care for the poor.
But the state’s fiscal year began July 1, and it’s not hard to foresee that the state will have a problem once the new federal cut comes down.
The state’s health chief, Bruce Greenstein, has begun meeting with provider groups — hospitals, physicians and so forth — to prepare for a cut of $859 million from the $7.7 billion in combined state and federal money that pays for health care for the poor in Louisiana.
“There’s no point in waiting until Oct. 1,” Gov. Bobby Jindal said Tuesday.
He is right, and though this cut comes a bit out of left field — it was a last-minute provision of the recent federal highway bill — nevertheless it should be dealt with as soon as possible.
The bad news is that this will be a significant cut, and poor people will suffer.
Note that Greenstein’s meetings are not with representatives of the poor. They have little or no influence in the State Capitol. The Medicaid problem is about the providers, influential groups like doctors and nursing home owners. Their reimbursements for Medicaid are where at least some of these economies will have to be made.
On the principle of never letting a crisis go to waste, Greenstein hinted that the administration might try to force changes in Medicaid. “We are looking at the situation with an eye toward some transformative changes in the way we deliver services,” he said.
The suspicious — who are numerous among health-care providers — might well see this as a promise, or a threat, to make cuts that the administration sought earlier but was forced to compromise on in the legislative session.
We don’t envy Greenstein’s job. This is a cut that Congress made too suddenly, without proper reflection on its impact on Louisiana’s already-passed budget for this fiscal year.
But if it is coming, the governor and Greenstein are right to tackle it as early in our fiscal year as possible.