Louisiana Medicaid program has $50M budget gap

by Walter Pierce

State health officials are asking lawmakers to close with more money, rather than cuts.

BATON ROUGE, La. (AP) - Louisiana's Medicaid program that cares for the poor, elderly and disabled has a $50 million budget deficit that state health officials are asking lawmakers to close with more money, rather than cuts.

The shortfall for the 2013-14 fiscal year that began July 1 was detailed in a financial update this week to the Legislature's joint budget committee from the Department of Health and Hospitals. The Medicaid forecast is due with the start of November each year.

Despite the gap, DHH Undersecretary Jerry Phillips said he doesn't expect any cuts to fall on services or the health care providers who care for Medicaid patients. Instead, he said the department will ask lawmakers for dollars to close the hole in the spring legislative session.

To avoid cuts, lawmakers and Gov. Bobby Jindal's administration will need to come up with about $19 million in state cash, which can be used to draw down federal matching money to eliminate the deficit.

"I believe that the Legislature working with the administration will be able to fund that," Phillips said. "We believe it's a reasonable ask, and we will be working with the legislative leadership."

The shortfall is modest in a program expected to top $7.7 billion in this year's $25 billion budget.

Phillips described the Medicaid forecast as a strong improvement over previous years when unexpected jumps in people qualifying for and using Medicaid services created larger shortfalls. He said this year estimates of service costs and use are on track.

"This is good news," Phillips said. "I've been looking at budgets for a long, long time, and it's quite a pleasure and it's quite a satisfaction when you look at a budget and utilization is where you projected."

He said this year's shortfall is tied to two things DHH couldn't anticipate:

-A federal court order requiring Medicaid coverage of certain therapy services for children who are autistic or have other developmental disorders, which is estimated to cost $30.7 million.

-A tax on health insurers under the federal health overhaul law that is applied to managed care organizations participating in state Medicaid programs, which is estimated to cost Louisiana $19.7 million.

The Medicaid forecast also notified lawmakers of a separate $104 million shortfall in the pharmacy program, but the issue is more of an accounting adjustment since DHH has identified drug rebate dollars to fill the gap and simply needs legislative approval to spend the money.