Republicans on the Louisiana House Appropriations Committee blocked, for the third time in the past month, five Medicaid contracts with private companies that coordinate health care for 1.2 million residents. The committee’s 17-7 vote Friday (Nov. 17) brings into question whether health care for about a quarter of the state will be disrupted early next year.
The contract renewals have been repeatedly delayed by a power struggle between Gov. John Bel Edwards, a Democrat, and House GOP leadership. The Edwards administration said if the contracts weren’t approved Friday, major problems could arise for Medicaid-backed health care delivery. Republicans have pressed the governor for more oversight and efficiency measures in the program.
The five Medicaid agreements are collectively worth $15.4 billion over 23 months, about a quarter of the state’s budget. More than half of the money involved is federal funding. Over half of the people they help manage health care for are children. If lawmakers don’t approve the deals, they will expire Jan. 31.
“We need to prepare one way or another for what is going to happen on Jan. 31,” Matthew Block, the governor’s general counsel, told legislators. “The (health) department has to have a plan in place starting today.”
House Appropriations Committee chairman Cameron Henry, R-Metairie, led calls for more oversight more oversight of health care spending in the contracts, which Gov. Bobby Jindal initially hammered through in haste a few years ago.
These types of contracts are something conservatives typically support. They have essentially privatized Louisiana’s Medicaid program, turning over most of the management to five companies.
Prior to these Medicaid contracts being in place, the state ran the entire Medicaid program itself through a fee-for-service system. Democrats and Republicans agree that the new way of operating has saved the state Medicaid program money.
Henry said he supports using the contracts to manage Medicaid, he just wants to make sure the money is being spent as efficiently as possible. He has convinced most of his Republican colleagues on the Appropriations Committee to put off approving the contracts until December, when he hopes more oversight provisions will have been inserted.
For example, Henry asked that the contracts explicitly give the legislative auditor the oversight and ability to explore Medicaid spending by the private organizations managing care. The Edwards administration has argued that the auditor already has this power in the proposed contracts, and that all of Henry’s other demands can be addressed after they are approved through policy changes, new rules and possibly new legislation next spring.
“We welcome these ideas and many of them are good ideas,” said Dr. Rebekah Gee, secretary of the Louisiana Department of Health. “They don’t have to be done in the contract.”
Henry responded bluntly to these appeals from the Edwards administration: “The things that you are fine with, put in the contract.”
The standoff between the governor and legislators could affect Medicaid recipients, and care providers — chiropractors, doctors, clinics and nurses — who treat Medicaid patients and work with the five companies involved in the contracts, said state Rep. Katrina Jackson, D-Monroe, who voted in favor of the contracts Friday.
“This is a little bit more serious than politics guys. We’re talking about jobs, and we’re talking about the health care system in Louisiana,” Jackson told her colleagues.
The Edwards administration tried to paint a doomsday scenario for the lawmakers, outlining what would happen if the contracts never got approved. Without the contracts, substance abuse treatment, in-patient mental health, out-patient care and transportation to doctor’s appointments would be in jeopardy for Medicaid patients, according to health officials. Those services are currently governed by the contracts exclusively, and it would be difficult to start paying providers directly because the state doesn’t have a system in place to do so.
Perhaps more important, allowing the contracts to lapse would blow a $350 million hole into the state’s current budget. Louisiana would lose about $200 million worth of taxes the state collects from the private companies who manage Medicaid now. Lawmakers and the governor would also no longer be able to delay one month of Medicaid payments — about $150 million it makes to these companies — as called for in the current budget plan. The Edwards administration says no contracts would result in no funding for the Medicaid program from April to June.
Henry has never said the Republicans don’t intend to approve the contracts, only that they want to put the vote off until December. The Edwards administration has said it doesn’t make sense to delay them.
“It’s just too much disruption,” Gee said. “If we have answered every question the committee has had, what’s the basis for not approving it?”
In an awkward moment, Legislative Auditor Daryl Purpera was put in the middle of this fight between the House Republican leadership and the governor. Before the Republicans blocked the contracts again Friday, Purpera was forced to answer questions from lawmakers about what he thought of the proposed Medicaid arrangements.
Purpera said the current contracts — supported by the governor — allowed him to do his job, though he conceded that having language inserted that explicitly requires the legislative auditor’s oversight would be helpful.
Purpera, who seemed uncomfortable being forced to side with either the governor or the House Republicans, works directly for the Legislature, which the GOP controls.
The Republicans may intend to approve the contracts next month, at a December meeting, but the Edwards administration stressed that the stalemate was making the companies who manage Medicaid for the state uncomfortable. Block told the legislators the five “very big companies” who are waiting on the state to sign off on their agreements were watching Friday’s hearing live to see what would happen.
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Julia O’Donoghue is a state politics reporter based in Baton Rouge. She can be reached at email@example.com or on Twitter at @jsodonoghue. Please consider following us on Facebook at NOLA.com and NOLA.com-Baton Rouge.