Government
Louisiana may cut Medicaid pay to physicians
■ The state is facing the nation's largest decrease in federal Medicaid funding, plus a projected slump in state revenue.
By Doug Trapp — Posted April 24, 2009
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Louisiana is facing dramatically reduced federal Medicaid funding, unresolved Medicaid debt to the federal government and declining revenues.
"There is a great deal of uncertainty about how those issues are going to be resolved," said Dave Tarver, executive vice president of the Louisiana State Medical Society. Tarver said Gov. Bobby Jindal has suggested an across-the-board 7% Medicaid pay cut for physicians.
The state is facing the largest decrease in federal Medicaid funding in the nation, according to Alan Levine, secretary of the Louisiana Dept. of Health and Hospitals. The federal government pays for 72% of Louisiana's Medicaid program. But by 2011, the federal share will shrink to 63% because the federal government is counting hurricane relief funds as income, Levine said in an April 6 letter to the Dept. of Health and Human Services.
"That means the state is going to have to come up with several hundred million dollars more in the future in order to basically stay even," Tarver said. The state's Children's Health Insurance Program is facing a similar reduction in federal matching funds, Levine wrote.
The state also owes about $700 million to the Centers for Medicare & Medicaid Services for inappropriately using Medicaid funding for medical education in teaching hospitals instead of care for the poor, Tarver said. "The state's got to come up with that money somewhere. That's not in the budget."
All of these problems and others are projected to lead to $1.2 billion less in Medicaid revenues for fiscal 2010, which begins July 1. The program has an annual budget of about $5 billion. Tarver said he expects about $400 million in Medicaid reductions in 2010, although that number could change.
