The Associated Press July 29, 2010, 5:37PM ET

Medicaid cuts take effect Sunday in Louisiana

The rates paid to many of the private health providers in Louisiana's Medicaid program will fall Sunday to trim spending by $168 million in the program that provides care to the poor, elderly and disabled.

The latest cuts to private hospitals, home- and community-based care providers, doctors and specialty service providers are the final piece of balancing this year's $6.5 billion Medicaid budget. Department of Health and Hospitals Undersecretary Jerry Phillips said Medicaid funding was cut by $277 million in the 2010-11 fiscal year that began July 1.

Health providers say the cuts - along with other rounds of reductions over the last 18 months - are shrinking patients' access to care by chasing some providers away from treating Medicaid patients, even as more people move onto the Medicaid rolls.

More than 1.2 million Louisiana residents are enrolled in the state's Medicaid program, Phillips said.

"If you're a Medicaid consumer, I think that some of these cuts are just smack in the face of access to services. I think you're going to see fewer physicians seeing Medicaid patients and fewer services available," said John Matessino, president of the Louisiana Hospital Association.

Larger privately owned hospitals are taking the biggest hit. They'll be paid nearly 5 percent less for each Medicaid patient they see. Matessino said the cuts will cause scattered layoffs and a scaling back of some hospital services.

With the upcoming cut, the rates private hospitals are paid for taking care of Medicaid patients have been slashed 19 percent over 18 months, Matessino said.

Rural hospitals haven't taken those cuts because they were shielded by lawmakers. Matessino said those rural facilities often operate with such tight budgets that any reductions could shutter them and leave residents in parts of the state without access to care.

Rate reductions to programs that provide home- and community-based services to the developmentally disabled and elderly and physicians' services were smaller than those levied on the hospitals, Phillips said.

Some spending areas were exempt from the cuts, including hospice service providers, federally qualified health clinics and rural health clinics. The Medicaid drug program also wasn't cut this time after previous rounds of reductions.

The cuts come as the economic climate has pushed more people onto Medicaid rolls. Phillips said 60,000 more people enrolled in Medicaid over the last year, and patients are using the program's services more.

If the rolls and service use continue to grow, that could cause a deficit in the program - and a new round of cuts later this year. Phillips said the health department will have an updated Medicaid forecast in November to determine whether more reductions are needed.

And the state's budget troubles worsen in the 2011-12 fiscal year, with more cuts expected for health care and the Medicaid program.

"It only gets darker," Phillips said.


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