Louisiana Officials Discuss Medicaid Changes

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HHS Secretary Mike Leavitt last week met with Louisiana Gov. Bobby Jindal (R) and other policymakers to discuss changes to the state's Medicaid program, among other issues, the New Orleans Times-Picayune reports. The meeting comes 18 months after the state rejected a Leavitt-backed plan to restructure safety net funding, according to the Times-Picayune.

The meeting focused on three issues:

* Changing the Medicaid program into an HMO-style system in which beneficiaries would choose a managed care plan and use local clinics;

* Determining federal reimbursement to the state for damage Charity Hospital sustained during Hurricane Katrina; and

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* Settling claims that the federal government overpaid Louisiana $600 million for Medicaid.

Louisiana Department of Health and Hospitals Secretary Alan Levine said that the Medicaid changes would not disrupt the flow of charity care funding and instead would use funds already allocated by the state and federal government for the program. If an agreement is reached, the proposed changes would first affect three major markets by 2010 -- likely Baton Rouge, New Orleans and Shreveport, according to Levine. He said it is unclear whether the changes would increase the state's Medicaid rolls to reduce the number of uninsured residents or only affect current beneficiaries.

The state officials and Leavitt also discussed how much the federal government will pay for damages to Charity Hospital. The state says the federal government should pay to replace the hospital at an estimated $492 million. However, the Federal Emergency Management Agency estimates the cost in the tens of millions of dollars, according to the Times-Picayune. The state would use the funds to finance a new $1.2 billion teaching hospital in New Orleans. However, if the federal funding is not granted, "it could imperil the project by increasing the subsidies required from the state," according to the Times-Picayune.

Lastly, the state discussed three Medicaid "disallowances" that the federal government claims it paid Louisiana. Levine said that the state protests the $600 million figure and is working to reduce the amount it must pay back to the government to a fraction of that amount (Moller, New Orleans Times-Picayune, 7/25).

Reprinted with permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign up for email delivery at kaisernetwork.org/email . The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation. © 2007 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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