SADOW: JBE And Louisiana Leges Squander Medicaid Dollars

It’s bad enough that both Democrat Gov. John Bel Edwards and Louisiana’s Republican legislative leaders have adopted as their main fiscal strategy pennies from heaven. It’s unconscionable that they have to make matters worse for taxpayers and the infirm on top of that with atrocious management of Medicaid resources.

Rather than start the long overdue paring of state government, imperative more than ever with revenue shortfalls courtesy of Edwards’ mandates and restrictions in response to the Wuhan coronavirus pandemic, the governor and a rather captive set of GOP leaders just cross their fingers and hope money rains down on the state from federal taxpayers to stave off a huge budget deficit, looming perhaps as soon as early next year. The last thing they need to do in this environment is to aggravate matters with extra needless, if not counterproductive, spending.

But that’s exactly what they seem poised to do. This fall, the Department of Health issued a rule revision that would shovel more money to nursing homes paid through Medicaid. The latest data indicate that Medicaid covers about four-fifths of state nursing home residents, which means, since typically other payment sources are charged higher rates, that around three-quarters of industry revenues come from taxpayers. All in all, state taxpayers funnel around $1.2 billion yearly into nursing home operators’ pockets.

Recognize that the state already has given large boosts to nursing homes this year as a result of the pandemic. Reimbursements were jacked up $12 a day per bed, and empty beds instead of receiving 10 percent of that amount zoomed up to 100 percent.

Yet the Edwards Administration wants to push the rate higher it says as a means to encourage more single room occupancy. Instead, it should try to wean care off institutions, which in Louisiana tilts much more in that direction than nationally, and could happen if as part of this LDH would reduce the number of licensed beds allowed as rooms become converted into single occupancy.

Given industry clout, that seems unlikely to happen. It has resisted tooth-and-nail any such rebalancing that would reduce taxpayer costs but also its profits, or moves such as placing long term care clients into managed care that would do the same.

Such is the thrall in which legislators operate relative to this special interest that for over 15 years the Legislature has refused to amend two parts of one law that shovels tens of millions of dollars wastefully to the industry. In 2005, and again in 2017, the Legislative Auditor pointed out that if the state followed the best practices of other states, in fiscal year 2016 it would have saved nearly $77 million.


However, R.S. 46:2742 continues to force the state to reimburse for Medicaid calculated on all beds, not solely those for Medicaid, that includes the higher rates charged for other payers. And it additionally sets a minimum facility rental rate of 9.25 percent return to capture capital expenses, well above the long-term Treasury rate of recent years and hundreds of basis points above what other states typically set.

Instead of asking legislators to realize these sensible savings, the LDH, following industry desires, proposes raising total taxpayer responsibilities by at least $5.2 million next fiscal year while it “may reduce the total direct and indirect cost to the provider to provide the same level of service … since this proposed Rule increases payments to providers for the same services they already render.” Without any reduction in allowed beds, this only encourages more building when every health and economic indicator would recommend shrinking facilities’ footprints.

Legislative panels could veto the change prior to the next (Dec. 20) printing of the State Register (which contains all regulations) revision. Yet the gutless chairmen of each chamber’s Health and Welfare Committee, Republicans state Rep. Larry Bagley and Sen. Fred Mills, rejected any hearings even to discuss the matter.

If spending more on long term care, new commitments need to go to home- and community-based services, not in increasing inefficient expenditures elsewhere. If not, with the state staring into a yawning deficit it doesn’t need to aggravate that more. So, if the likes of Edwards, Bagley, Mills, or any other legislator who doesn’t speak out against this comes to you in the future asking for more taxes and/or telling you what programs they will cut that will affect your life, just know even though you’re their bosses it’s not you they’re working for.



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