Proposals Make It Tougher to Cut Health Facilities

10-6-14 11:04am

BATON ROUGE, LA (AP) — Voters will make decisions in November that could set the course for state health care financing for years.

The November 4 ballot includes two constitutional amendments that would make it more difficult to reduce the dollars paid to private hospitals and nursing homes for taking care of Medicaid patients.

Supporters said the protection would stabilize funding for critical health care services and help protect hospitals and nursing homes from damaging cuts that could threaten patient care.

"Our main goal is people in the community need services, particularly Medicaid and uninsured folks who are some of the most vulnerable and look to the hospitals when they need services," said Paul Salles, president of the Louisiana Hospital Association.

But the measures have raised concerns, including from Gov. Bobby Jindal, about what happens if it's tougher to cut hospitals and nursing homes in a budget where so much already is shielded from slashing.

Critics say the amendments would protect a certain segment of health care at the expense of home-based services and hospice programs. They say public colleges would become the least-protected area of the budget and more vulnerable to cuts in financial downturns.

"These amendments will serve to tie the hands of policymakers who already have a tough enough time balancing the budget," said Jan Moller, head of the Louisiana Budget Project. "This shackles the budget."

The proposals received overwhelming support from lawmakers when they were passed last year, pushed by powerful lobbying groups. Estimates are they could affect nearly $2 billion in the Medicaid programs.

Currently, Medicaid provider rates are set by the Department of Health and Hospitals. The proposals would eliminate the department's ability to cut rates without backing from lawmakers.

The first constitutional amendment on the ballot would set a minimum level for Medicaid patient reimbursements paid to nursing homes, pharmacies and institutions for the developmentally disabled. Cuts to payments would face restrictions so they could be no worse than for other health care providers and would require the support of two-thirds of lawmakers.

Andrew Muhl, director of Advocacy for AARP Louisiana, said that would give institutions priority for funding over home- and community-based services that are more popular with elderly residents and families caring for relatives who are developmentally disabled.

"There are a lot of other health care entities that are not protected that would be more vulnerable to cuts," he said.

Joe Donchess, executive director of the Louisiana Nursing Home Association, said the groups that would have greater protection from cuts assess millions of dollars in fees that the state uses to draw down federal Medicaid dollars.

"They don't mind that we pay $91 million or $92 million in provider fees, they just don't want us to see any of the benefits that come from that. Don't you see the absurdity in that?" he said.

The second constitutional amendment on the ballot would let hospitals pool their money and use those dollars to draw down new federal Medicaid money to compensate them for their care for the poor and uninsured.

It involves a new fee assessed on the facilities, similar to what is paid by nursing homes, and lawmakers would have to approve the fee structure before it could begin. In exchange, cuts to hospital payments would be limited and require a two-thirds vote of lawmakers.

Salles said the hospitals, which have seen their Medicaid rates cut by 26 percent since 2009, wanted to make sure if they generated new dollars for the budget that they would get something in return.

"We think it's a fair ask," he said.

The governor was unable to veto the measures because they were constitutional amendments, but he didn't support them when they moved through the Legislature.

"We have concerns because they lock in rates and escalating increases that could result in significant costs to the state while creating a mechanism that could result in increased taxes for patients," Jindal spokeswoman Shannon Bates said in a statement.

But the governor doesn't intend to push their defeat at the polls.

"We'll abide by the will of the voters," Bates said.