Lawmakers examine $100M reduction for state Department of Health

By Victor Skinner | The Center Square

A $100 million reduction in increased funding for the Louisiana Department of Health could result in cuts for nursing homes, pediatric services, psychiatric beds and other Medicaid services, officials told lawmakers on Tuesday.

The Senate Health and Welfare Committee heard from LDH officials and others on Tuesday about the potential impact of the last-minute budget reduction Chairman Sen. Fred Mills, R-New Iberia, described as “a major, major surprise.”

The $100 million reduction to the LDH budget increase Gov. John Bel Edwards requested came on the final day of the legislative session as part of negotiations between chamber leaders. Edwards can veto the reduction but would have to reduce spending elsewhere to balance the budget.

Health Secretary Stephen Russo told lawmakers the reduction could result in as much as $700 million in lost funding when federal matching funds are considered, depending on which services the department would reduce.

“There aren’t really any good places you can make cuts of this size,” he said.

Russo presented a list of possible cuts to the committee that involves optional Medicaid services states are not required to offer in the federal program, including funds for public-private partner hospitals, nursing homes, elderly care, health clinics, mental health, substance use and ambulatory surgical centers.

Edwards has not yet reviewed the budget to consider line-item vetoes to restore the funding, but “next week, we will be going through it to decide how to address it,” said Barbara Goodson, deputy commissioner at the Division of Administration.

Sen. Sharon Hewitt, R-Slidell, a Republican candidate for governor, noted that LDH’s projections for its roughly $20 billion budget were roughly 5% below actual costs through May 5, while the $100 million cut represents about 0.5% of the budget.

“Budget appropriation for private providers in round numbers was $16.7 billion. The current forecast as of May of this year was $15.9, it’s a $900 million difference in what we appropriated versus at that point in time in May what we thought would be our forecast through the end of the year,” she said, pointing out other areas of the Medicaid budget showed other smaller excesses.

“I would tell you I don’t believe we are accurate enough in our ability to forecast to be wringing our hands over $100 million,” she said.

Committee members from both political parties focused on how the cuts would impact providers and patients. Officials said certain cuts could result in increased crime, suicide rates, emergency room visits, and advanced cancer, increasing costs to the state in other areas.

“We’re in a jam. I pray the governor vetoes this. I’m going to call him personally and talk to him, but I think we did some things that never should have been done, especially when you have surpluses like this,” said Sen. Bodi White, R-Baton Rouge, who expressed regret in signing the budget he said he didn’t have time to read.

The committee ultimately opted to send a letter to Edwards to request the governor restore the funding.

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