Louisiana Adopts $240 Million in Medicaid Cuts - August 10, 2009

The Louisiana Department of Health and Hospitals has issued new rules that will result in $240 million in Medicaid spending reductions.  The cuts, which took effect on August 3, were precipitated by a $1.3 billion shortfall in state revenues in State Fiscal Year (SFY) 2009-2010, even bleaker state revenue shortfall forecasts, and the potential loss of almost $1 billion in federal medical assistance percentage (FMAP) payments.  The new rules are estimated to reduce Medicaid payments to non-state hospitals by $43 million and payments to physicians by $19 million, as well as impose co-payments on certain adult emergency room visits.  These cuts are in addition to those imposed on state providers.  The LSU Health Care Services Division saw a $55 million reduction in funding under the SFY 2009-2010 budget, primarily due to a decrease in appropriated State General Funds for non-reimbursable costs and Medicaid-Disproportionate Share Funds for indigent services.