Louisiana’s health department wants to keep the five managed-care companies that coordinate health services for most state Medicaid patients in place, extending the lucrative government contracts for another two years.
Lawmakers on the joint House and Senate budget committee on Friday will consider whether to approve the extensions, expected to cost $15 billion with federal and state dollars.
Enacted by former Gov. Bobby Jindal’s administration, the contracts began in February 2015 and are set to expire in January. The Department of Health is proposing to continue them through December 2019 while working to seek new bids for managed-care work.
Andrew Tuozzolo, health department chief of staff, said the 23-month extensions will come with more accountability and new incentives aimed at improving health quality. He said the Jindal administration-era contracts didn’t have enough controls.
“We just believe there were ways in which the previous contracts were written that didn’t drive health care outcomes and quality and really bear down on how we do it more efficiently,” Tuozzolo said Thursday. “With the extensions, we’ve kind of made a large step toward getting where we want to be.”
The private companies coordinate services for 90 percent of Medicaid recipients, nearly 1.5 million people — pregnant women, children and adults who receive the government-financed coverage through the Medicaid expansion program. Louisiana pays a per-member, per-month fee for each Medicaid patient enrolled in a health plan with the companies.
Republican House Speaker Taylor Barras, R-New Iberia, said he hasn’t heard any lawmakers object to the contract extension. But he expects many questions at Friday’s hearing, focused on ways to limit costs.
GOP lawmakers have criticized Medicaid spending levels, questioning if the program has grown too large and is unsustainable. Louisiana’s Medicaid budget is $12.5 billion in the current financial year, 44 percent of the total $28 billion state operating budget.
State Sen. Eric LaFleur, the Democratic chairman of the joint budget committee, expects the contract extensions to receive criticism, some specific to individual managed-care companies and others questioning the need to have five different companies.
But LaFleur, of Ville Platte, said he doesn’t think Louisiana could end one of the contracts now, describing it as too disruptive for patient care. Tuozzolo said the health department intends to rebid the contracts, with plans to have new managed-care deals in place when the extensions end in 2019.
Jindal moved to the privatized, insurance-based model in 2012, shifting from Louisiana’s previous system of directly reimbursing doctors and hospitals that cared for Medicaid patients with a fee paid for each service rendered.
LaFleur criticized the Jindal administration contracting process as too rushed, with too little data collected and too few quality assurances. But he said the care provided to Medicaid patients has improved.
“I think the overall system is better. It’s more expensive, but we don’t have a Yugo now,” LaFleur said, referencing the notoriously shoddy car. “We probably have a Toyota.”
Tuozzolo said the managed-care system has saved the state money by better coordinating care for patients and having more management over the services provided.