As Louisiana providers continue their legal fight against state Medicaid cuts, the state's hospitals appear to stand little chance of seeing funding restored in the next fiscal year, starting July 1.
Louisiana Hospital Association President Lynn Nicholas said that hospitals had hoped to restore $30 million of the $40 million axed from their payments in the current fiscal year, but she expects to see only about $8 million in relief when the Legislature adjourns this week.
"That's only 20% of the total cut, so we didn't get a lot," Nicholas said.
Louisiana's total Medicaid budget for hospital inpatient and outpatient services in the current fiscal year is just less than $600 million.
Meanwhile, U.S. District Judge Richard Haik in Lafayette, La., issued a written opinion of his earlier order imposing a preliminary injunction that blocked the state's 7% Medicaid cuts. The state appealed, and the 5th U.S. Circuit Court of Appeals in New Orleans lifted the injunction on May 15.
Haik's is the first written decision assessing providers' protections against Medicaid cuts since the repeal of the Boren amendment in 1997. The Boren amendment required state Medicaid programs to pay "reasonable and adequate" rates to providers.
"It's the first decision to determine what rights remain after Boren," said Steve Sullivan, an attorney for the providers.
Haik ruled that state officials failed to abide by a "public process" provision of the Balanced Budget Act of 1997, which requires states to publish rates, disclose the methodology used to set rates, and give providers and beneficiaries a chance to comment.
Providers also argued that the cuts violated the equal-access provision of the Social Security Act, which requires Medicaid payments to be adequate for quality and access to care.
In his decision, Haik cited testimony of Louisiana Medicaid Director Thomas Collins and other state officials who said the only justification for the Medicaid reductions was to avoid a budget deficit, and that no studies were performed to determine their impact on providers.
Haik said the cuts pose a "real and substantial threat of irreparable injury" because they might force some providers to discontinue services.
Providers have asked the 5th Circuit to reverse its decision. Arguments are set for Aug. 7.
Payment squabbles are likely to drag on for months. The state announced that it will have a plan in place by July to recoup some $50 million that was overpaid to providers in March, April and part of May, while court orders were in effect. But the department said it does not plan to collect all of the money until the end of December.