The BP well disaster dominated the state Legislature's most recent session, derailing efforts to find long-term solutions to Louisiana's enormous budget shortfall and growing Medicaid population.

 

"The session that needed to be dominated by a thoughtful and responsible discussion of the budget was missed because of the pressures of the oil spill," said Dr. Van Culotta, who chairs the Louisiana State Medical Society's Council on Legislation. "Having said that, everybody in healthcare is quite concerned about the potential for the cuts to the poorest and sickest of our population, namely the Medicaid beneficiaries."

 

While the Legislature and Gov. Bobby Jindal patched a $580 million hole in the budget, the state's money problems are far from over. The state Department of Health and Hospitals' (DHH) Medicaid budget was cut by $280 million for the current fiscal year. That would mean a 4.6 across-the-board cut for hospitals and providers, although DHH plans to make more targeted reductions to help the doctors that provide the most care for Medicaid patients.

 

The only good news was that DHH asked physicians to help figure out a way to avoid across-the-board cuts by looking for cost-cutting opportunities, Culotta said. The physicians are hoping they and the agency can find solutions that don't involve reducing access to care.

 

"I think that's what everybody's afraid of," Culotta said. "We may reduce care in a time when access needs to be there, especially in a time when we're going to be adding more and more people in the coming years to the (Medicaid) rolls."

 

The program covers 57,000 more people this year than last, and state officials expect enrollment to continue rising. If the Medicaid budget falls short during the fiscal year, DHH may have to ask for more money or make additional cuts.

 

Culotta said the state Legislature may have to call a midyear special session to deal with the budget because it's such a huge problem.

 

Unfortunately, nobody did what they needed to do to deal with the problems during the regular session, Culotta said. Many people worked hard, but they were never able to sit down, discuss their differences and hammer out some meaningful compromises.

 

The fact that they couldn't, reflects how much the Jindal administration and the state were and continue to be overwhelmed by the disaster in the Gulf, Culotta said.

 

Cutlotta said despite the missed opportunities, there were some significant accomplishments for physicians and other healthcare providers.

 

"We were able to modify how the PCF runs, operates and is supervised. And I think that brings cost savings to providers," Culotta said.

 

The Patient's Compensation Fund accounts for close to half the cost of medical malpractice insurance. The remainder is the cost of private insurance for the first $100,000 in liability.

 

The PCF board of directors and Insurance Commissioner Jim Donelon had tangled over whether the PCF should be considered an insurance company.

 

Donelon argued that the PCF should retire an unfunded liability of $400 million, money the fund owes and will owe in claims over and above what it has on hand and will take in at current rates.

 

PCF board members felt the $600 million on hand was more than adequate. They argued that treating the PCF as an insurance company and forcing it to reserve more money would unnecessarily increase the rates for physicians and other providers.

 

The PCF will now be considered an off-budget state agency, Culotta said. This will allow doctors' money to be spent more promptly to adequately compensate the victims of malpractice and medical negligence.

 

"We still will be responsible to the state. Our funds will still be held in the state's coffers," Culotta said. "We'll still make reports to the state and the state Legislature, but the budgetary requirements where the state says, 'OK, we have to make a 10 percent across-the-board cutting of personnel' will not affect the PCF."

 

The Legislature also removed the PCF from the insurance commissioner's supervision, Culotta said. The PCF will be allowed to run as originally intended, as a pay-as-you-go fund, which means the fund may be able to give some significant rate reductions to physicians.

 

For 2010, the PCF board had planned to reduce rates by as much as 17 percent for doctors and 15 percent for hospitals. But under pressure from the insurance commissioner, the board raised rates by 2.8 percent overall.

 

The Medical Society also helped defeat a punitive damages bill designed to help people affected by the BP disaster, Culotta said. Although the bill initially gained support, the language was so broad that the new law would have recreated the liability issues physicians faced more than two decades ago.