Amendment would protect hospitals, nursing homes from cuts

The state Senate Finance Committee on Monday advanced two proposed constitutional amendments that opponents said would protect more areas of the budget from cuts.

The propositions, contained in House Bills 532 and 533, would provide more financial stability for hospitals, nursing homes, intermediate care facilities and pharmacists through constitutionally protected funds.

But that would be to the detriment of higher education the only other big unprotected area of the budget and legislators would lose even more budget flexibility, opponents said.

The committee voted 9-1 to approve the measures, with state Sen. Dan Claitor, the lone no vote. The bills now move to the state Senate floor.

Claitor, R-Baton Rouge, had asked about the measures’ impact on higher education funding.

“It leaves education out and kind of by itself,” replied Finance Committee chairman Sen. Jack Donahue, R-Mandeville.

HB532 would 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.

House Speaker Pro Tem Walt Leger III, D-New Orleans, said hospitals need stability after $260 million in budget cuts since 2009. He said hospitals are getting reimbursed 60 cents for every $1 of care. The assessment should bring reimbursement to 80 cents on the dollars, he said.

“It is designed to give ... both predictability and stability,” said Sean Prados, vice president for the Louisiana Hospital Association.

An assessment distribution formula would be approved annually by the Legislature. A rate floor would also be established as well as a potential inflationary factor in which the base rate could go up every year.

The constitutional amendment would also provide protections in times of budget strife, with a super-majority vote required to cut the base rate and the cut cannot exceed the average for other Medicaid program provides.

“We cannot be singled out,” said Paul Salles, chief executive officer of the Metropolitan Hospital Council of New Orleans.

Public Affairs Research Council President Robert Travis Scott said the length of the proposition suggested for inclusion in the constitution made it “better in statute instead of the constitution. It will give ya’ll more flexibility.”

HB533 would provide constitutional protections for existing “bed taxes” and other fees paid by nursing homes, pharmacies and intermediate care facilities. It would also keep separate accounts for each entity within the fund. The proposition would establish a Medicaid rate floor that cannot be reduced and provides for an inflation factor.

The constitutional protection from budget cuts would exist as those in the hospital proposition.

“We have been the heavy-lifters for 20 years with no benefit from these funds,” said Joe Donchess, executive director for the Louisiana Nursing Home.

State Department of Health and Hospitals Secretary Kathy Kliebert said both proposed constitutional amendments would limit the department’s flexibility in budget cutting. “It gives us limited places to go,” Kliebert said.

She said the propositions pit institutions against home- and community-based services that have no protection.

Representatives of the AARP, an organization that lobbies for older Americans, and the Advocacy Center complained about the potential impact on home- and community-based services -providers that cannot generate fees. AARP Louisiana legislative director Kerry Everitt said 87 percent of AARP members want to remain in their communities as long as possible.