Latest Medicaid Cuts Hit Infants, Children, Hospitals on Louisiana Medical News

Latest Medicaid Cuts Hit Infants, Children, Hospitals

By: TED GRIGGS

The most recent cuts to the state's Medicaid program will affect mainly very sick infants and children, and reduce community hospitals' budgets by more than $53.1 million, according to the Louisiana Hospital Association.

Roughly half of that total will come from four hospitals.

The estimated impact at Ochsner Medical Center is $10.7 million, and $4.7 million at Tulane Medical Center, the LHA says in its letter to members of the state Legislature. Woman's Hospital in Baton Rouge will suffer a $5.8 million hit, while the impact at Regional Medical Center of Acadiana, which includes Women's & Children's Hospital in Lafayette, is $6.2 million.

"The impact of Medicaid cuts is disproportionately large for Woman's Hospital

because we are the largest provider of obstetrical and neonatal services in the

state," CEO Teri Fontenot said. "More than 70 percent of the babies born in Louisiana are covered by Medicaid; therefore, each time DHH makes an across-the-board cut, the financial impact to Woman's is greater."

Fontenot said the reimbursement for care to Medicaid recipients is now less than the direct costs of care.

Woman's delivered 7,950 babies between Oct. 1, 2009 and Sept. 30, 2010, according to figures compiled by ShareCor, a joint venture of LHA and the Metropolitan Hospital Council of New Orleans. Of those, 3,720 babies were covered by Medicaid.

Over the same period, Women's & Children's in Lafayette delivered 2,302 babies, 1,940 of whom were covered by Medicaid, according to ShareCor.

John Matessino, LHA president and chief executive officer, said the cuts are "horrendous" for hospitals with neonatal intensive care units, such as Woman's, Women & Children's, Lafayette General Medical Center and North Oaks Medical Center in Hammond.

Those hospitals don't really know what they're going to do or how they'll be able to continue with those kinds of cuts in Medicaid payments, Matessino said.

Fontenot said Woman's is looking at either reducing the scope of programs for which there is little or no reimbursement or eliminating those programs entirely.

That means that all patients, not just Medicaid recipients, will lose the benefit of those programs, Fontenot said.

Woman's cannot simply refuse to accept Medicaid patients, she said. The federal Emergency Medical Treatment and Active Labor Act requires that hospitals deliver the babies of women who are in labor when they come to the emergency room.

So, Woman's Hospital has no choice but to provide a service for far less than it actually costs, Fontenot said.

The LHA and Matessino have described the latest round of cuts to the Medicaid budget as "fiscally irresponsible" and even discriminatory to some providers.

"I think we're beginning to run into an access issue," Matessino said.

Everyone would like to get something for nothing, Matessino said. But the state government can't continue to ask hospitals, employers and private citizens to pay more than their fair share of healthcare costs because the state won't pay what it actually costs to treat Medicaid patients.

Right now those costs are being shifted to people with insurance, and workers and/or their employers have to pick up the slack, Matessino said.

State Department of Health and Hospitals officials have said the agency has been forced to make the cuts because of rising enrollment, and the accompanying demand for services in Louisiana's Medicaid program. The $7 billion program covers around 1.2 million people, most of whom are children.

DHH Secretary Bruce Greenstein has argued that the Medicaid program's continuing and growing budget problems demonstrate why Louisiana must move to a privatized healthcare solution for the poor.

In addition, the state's current, fragmented healthcare system delivers uneven quality and access and results in unpredictable costs, according to DHH. The system's design makes it difficult to promote and maintain health, a shift that is needed if Louisiana is going to improve its health outcomes in the midst of budget shortfalls.

Matessino said Gov. Bobby Jindal's administration has decided to slough off the Medicaid costs to businesses and individuals.

The governor is adamant that he is not going to pass more taxes, Matessino said. But every time the administration cuts Medicaid, it adds to the cost of health insurance for workers and their employers.

Matessino said the Medicaid reimbursement rates have now been reduced to pre-1994 levels. What business could survive that sort of reduction, he asked.

DHH has justified the continued cuts -- $250 million since February 2009 -- because the hospital programs have grown so much, Matessino said. But the programs didn't grow because hospitals are getting paid more for each patient; the programs have grown because the number of Medicaid recipients has jumped from 700,000-plus five years ago to more than 1.2 million today.