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Health Chief Warns Cuts Would Hurt La. Medicaid Program

Posted on: Saturday, 28 January 2006, 18:00 CST

By MARSHA SHULER

Health chief warns cuts would hurt La. Medicaid program

Louisianas Medicaid program would have $1.7 billion less for health care for the poor and uninsured if deep cuts sought by the Blanco administration come to fruition, the states health agency chief said Friday.

Department of Health and Hospitals Secretary Fred Cerise said the budget cuts could lead to eliminating programs such as hospice care, mental health rehabilitation and adult dentures. They are programs the state is not required to offer.

And there would still be a significant rate cut in the payments to hospitals, doctors and others who provide care for the poor and uninsured, he said.

Cerise said that would be the impact of a worst-case scenario budget Gov. Kathleen Blanco asked him to craft by slashing 20 percent of state funds.

For every $3 the state puts up for Medicaid the insurance program for the poor and uninsured the federal government puts up $7. So cuts grow deeper with every lost state dollar to bring in federal matching funds.

Its clearly an early starting point in the process, Cerise said. If it held true, it would be devastating to the Medicaid program.

The Medicaid program stood at $5.3 billion at the July 1 start of the current budget year. It provided health-care insurance for about 1 million people.

In the wake of Katrina, DHHs Medicaid budget got a $648 million reduction as the state struggled to realign its budget because of a lost revenue base in the devastated New Orleans area, Cerise said.

The 20 percent reduction for the new fiscal year would come on top of that and push the total to $1.7 billion, Cerise said.

It is not unusual for DHH to start out in the budget-planning process with deep cuts proposed and then get dollars restored. But this time around, the outlook is gloomier because of the uncertainty of a federal bailout and a dicey state revenue picture.

Cerise said the states Medicaid situation would be helped in the current and upcoming budget year if Congress approves legislation under which the federal government would pay 100 percent of Medicaid costs for those in hurricane-affected parishes who are now living in or out of state.

State officials are hoping for action in early February. Because Congress failed to act before it recessed, DHH had to proceed with reductions in payments to hospitals, physicians and others.

The hospital payment reductions are a minimum of 12 percent. DHH officials are also preparing to cut back on the states prescription- drug program if Congress doesnt act quickly.

The congressional bailout would be a significant fix for this (budget) year, Cerise said. He said it could also help a little with the coming years budget because to the extent it frees up any state match this year those funds could be carried over into the next budget year and relieve some of the cuts.

Cerise also said DHH is working with the federal Center for Medicare and Medicaid Services to determine how many Medicaid recipients left the state and would no longer be on Louisianas rolls for health-care coverage.

That could also help cushion the budget cuts if fewer people are covered, Cerise said.

Today, the state must cover the Medicaid costs of the relocated residents even though they no longer live in Louisiana.

Source: Advocate; Baton Rouge, La.

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