Some Louisiana hospital execs balk over Medicaid projections

One of the first acts of Louisiana's recently elected Democratic governor was to expand Medicaid eligibility under the Affordable Care Act (ACA). 

Gov. John Bel Edwards issued an executive order authorizing the expansion last January, almost immediately after he was inaugurated. It allowed nearly 300,000 Louisiana residents immediate entry into the Medicaid program, and opened up that option to another 224,000 with private insurance. It also made Louisiana the only state in the deep South to expand Medicaid eligibility.

The Pelican State's prior governor, Republican Bobby Jindal, had refused to expand Medicaid, although he kept a waiver in place that provided some primary care to state residents with incomes up to 200 percent of the federal poverty level.

But two hospitals that were recently converted from public to private institutions are questioning whether the expanded payments will actually help them out, The Times-Picayune reported.

At issue is whether the Edwards administration's projection that expansion will cut uncompensated care costs by 25 percent is realistic. The savings would lead to significant cuts in state funding that would cover the cost of such patients. The original projection was savings of 10.5 percent, but was recently bumped up.

"We agree that Medicaid expansion will save the state a significant amount of money," Greg Feirn, chief executive officer of Louisiana Children's Medical Center, which also operates University Medical Center in New Orleans, told The Times-Picayune. "We are debating pretty strongly that the savings is not 25 percent of uncompensated care. We believe that the original estimate of 10.5 percent is, while aggressive, much closer to reality."

Under the 25 percent savings scenario, University Medical Center could see its funding cut by $54 million. Another hospital, Lafayette General Medical Center, could lose $18 million in funding.

Most of the state's safety-net hospitals were privatized during Jindal's tenure as a way to save money. But many of the facilities continued to experience cash shortfalls.

To learn more:
- read The Times-Picayune article

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