Department of Health & Hospitals | State of Louisiana
Department of Health and Hospitals

DHH Announces Mid-Year Spending Reductions

Friday, Dec. 16, 2011  |  Contact: Lisa R. Faust; (225) 342-7913 or (225) 252-3579 (cell)

BATON ROUGE- Louisiana Department of Health and Hospitals' Secretary Bruce D. Greenstein today announced mid-year reductions in department spending of state general funds, and proposed utilization of other means of financing, in order to save $63.9 million in fiscal year 2011-2012. This package of savings does not include any provider rate cuts, reductions in eligibility or cuts in benefits. DHH's savings are part of an overall mid-year reduction plan for each agency to help address the state's shortfall from the current fiscal year.

"The residents of Louisiana depend on us to provide high quality services through the best possible use of taxpayer dollars. We are constantly examining our business operations to ensure that we are meeting that expectation," Secretary Greenstein said. "These reductions show that we have continued to find ways to operate smarter and more effectively while continuing our efforts to promote and protect the health of Louisianians."

Greenstein added, "Many of these cost-saving initiatives build on work that has already begun over the last few years to streamline our operations. Others represent new approaches to how we operate."

Reductions are in line with the Department's overall strategy of eliminating inefficiencies, tapping into existing resources both within the public and private sectors to spend state dollars more effectively, using new tools and technologies to streamline functions and maximizing our ability to leverage state general fund dollars where appropriate.

"From broader reforms like consolidating inpatient psychiatric beds to small steps like eliminating unnecessary fax lines, the philosophy remains the same: every dollar we spend must provide maximum value for the people of Louisiana," said Secretary Greenstein.

Reductions in state general funds (SGF) used for program offices and identified to help cover the Department's mid-year reductions are listed by program office below with SGF savings highlighted, plus the number of reduced positions, or "TO," included. The TO figure for each office includes positions that have been held vacant from the July hiring freeze.

Agency-wide Hiring Freeze ($1,979,438 SGF). Savings will be realized from the Governor's Executive Order BJ-2011 - 12, which implemented a limited hiring freeze across all executive departments.

Office of Aging and Adult Services ($480,805 SGF; 0 TO). Savings were realized through streamlining contracts for Single Point of Entry services. OAAS is also realizing savings from better leveraging dollars in the "Money Follows the Person" program.

Office of Behavioral Health ($2,678,993 SGF; 67 TO). Twenty-five of the TO positions are unfilled vacancies resulting from the hiring freeze. DHH will consolidate the 48 in-patient psychiatric beds from the Greenwell Springs Campus into the Jackson Campus of the Eastern Louisiana Mental Health System. The transition will move 103 staff positions from Greenwell Springs to the Jackson Campus. The consolidation of administrative, maintenance, food service and laundry functions, as well as some supervisory and clinic functions, will result in a reduction of 42 TO positions. Additionally, OBH is reducing expenditures to efficiently align resources and expenditures related to gambling and tobacco prevention programs, as well as using existing technology resources to reduce projected costs related to data management functions.

Office for Citizens with Developmental Disabilities ($1,729,332 SGF; 66 TO; 57 Non-TO). Twenty-one of the TO positions are unfilled vacancies resulting from the hiring freeze. The 13 adolescents currently residing at Leesville Residential and Employment Services Center will be transitioned to Pinecrest Developmental Center in Pineville. Pinecrest is better equipped to handle these residents, and the efficiencies gained by consolidation will ensure continued access to services for the adolescent population currently served at Leesville. It currently costs about $4 million per year to operate Leesville. The transition will result in a reduction of 44 TO positions. OCDD will also realize savings by accelerating the target date for planned job reductions related to decreases in population counts in state-run institutions. A total of 57 jobs were already scheduled to be eliminated on March 31, 2012 as more citizens with developmental disabilities are accessing community-based rather than institutional services. Of those, only 19 are currently filled. This action moves the date of those job reductions up to Feb. 15, 2012. OCDD will also consolidate some administrative functions and reduce administrative costs to realize savings with no impact on services.

Office of Public Health ($312,479 SGF; 38 TO). Twenty-eight of the TO positions are unfilled vacancies resulting from the hiring freeze. OPH will realize a savings from consolidating duplicative administrative functions between Children's Special Health Services and the Lead Poisoning and Genetics programs. Savings are also realized by reducing the number of fax lines being used and reducing operating costs in the Bureau of Emergency Medical Services with no impact on services.

Bureau of Health Services Financing/Medical Vendor Administration (Medicaid) ($3,627,620 SGF; 13 TO) The 13 TO positions are unfilled vacancies resulting from the hiring freeze. MVA achieved nearly half of its SGF savings by taking an innovative approach to enrollment of recipients into BAYOU HEALTH and not mailing every recipient hard copies of the five Health Plan Provider Directories. This approach, which maximizes new technologies, was approved by the Centers of Medicare and Medicaid Services. Because plans are continuously bringing new providers into their networks, paper directories are outdated and incomplete as soon as they are printed. Real time provider network information can be accessed through the website and BAYOU HEALTH enrollment agents (available by phone) will assist Medicaid and LaCHIP recipients in identifying which Health Plans their primary providers are affiliated with. Paper copies of the Directory will still be mailed upon request and will also be available at local Medicaid eligibility offices throughout the state. Additionally, the consolidation of eligibility offices with lower traffic counts in New Roads and in St. Tammany Parish will result in savings with no reduction in services or job eliminations. The New Roads office functions will consolidate into Baton Rouge and the St. Tammany functions will consolidate into Washington and Tangipahoa offices. All staff will be maintained. Each parish has several Medicaid application centers available to residents with six in Pointe Coupee and 17 in St. Tammany. MVA will also reduce travel by nearly 20 percent, delay or eliminate equipment acquisitions and recognize savings from contract delays.

Bureau of Health Services Financing/Medical Vendor Program (Medicaid) ($52.3 million SGF) The bulk of savings in the MVP program will be realized by using means of financing mechanisms to replace SGF dollars used to leverage federal funds. These mechanisms include accessing cost reports filed by LSU Health Sciences Center in Shreveport and uncompensated care costs and UPL payments that are above budget for the LSU hospital system in this fiscal year. Other savings are achieved through reducing the high Medicaid Disproportionate Share Hospital pool. Additionally, Medicaid has recognized a lower-than-expected expenditure increase in the December forecast.

Office of the Secretary ($1,230,207 SGF; 3 TO) The three TO are unfilled vacancies resulting from the hiring freeze.  Other savings in the Office of the Secretary are realized through a reduction in travel and a delay in executing certain contracts in this fiscal year. Savings are also achieved through aligning the budget of the Louisiana Commission for the Deaf with expected expenditures for the current fiscal year. Additionally, the Office of the Secretary is working on an improvement of the Department's information technology operations and services. The transformation's details are currently under development. A portion of the savings realized from changes in contracts is reflected here. Additional savings and as many as 40 to 50 job reductions are expected as a result of the realignment.  

Louisiana Emergency Response Network ($143,967 SGF; 0 TO). Savings were achieved by delays in hiring an executive director and financial officer.

Human Services Districts ($1,395,548 SGF). Five locally governed Human Services Districts provide outpatient mental health and addictive disorder services for persons with developmental disabilities, and other wrap-around and support services for the residents of their parish or region. While the budgets of these districts are largely line-item appropriated by the legislature and passed through DHH, the districts operate within their own governance and executive leadership, with the implementation strategy for reductions determined locally. Each will achieve savings through various techniques such as supply and travel reductions, contract delays, attrition savings and better use of Patient Assistant Programs to save on pharmacy costs. Each will incur different levels of savings, including $133,395 for the Florida Parish Human Services District; $198,711 for the Capital Area Human Services District; $277,042 at the Jefferson Parish Human Services Authority; $322,485 at the South Central Louisiana Human Services Authority; and $463,915 at the Metropolitan Human Services District (New Orleans metro area).

The DHH leadership team is working with the department's human resources office and the Louisiana Department of State Civil Service to ensure affected employees are provided, whenever possible, opportunities to fill needed vacancies in other offices or departments, and also will work with the Louisiana Workforce Commission to provide re-training opportunities as applicable.

"The measures outlined here represent not just a one-time approach to budgeting, but our ongoing philosophy of using tax dollars as efficiently as possible, while remaining focused on improving health outcomes," Secretary Greenstein said. "This philosophy is carried forward in everything we do. Yesterday, I had the pleasure to launch enrollment in our first phase of implementing BAYOU HEALTH. Actions announced today help us move forward with our key initiatives such as BAYOU HEALTH and the Louisiana Behavioral Health Partnership that will fundamentally change health care in Louisiana by building a healthier population."

The Louisiana Department of Health and Hospitals strives to protect and promote health statewide and to ensure access to medical, preventive and rehabilitative services for all state citizens. To learn more about DHH, visit http://www.dhh.louisiana.gov. For up-to-date health information, news and emergency updates, follow DHH's blog at www.myhealthla.org, Twitter at http://twitter.com/La_Health_Dept and search for the Louisiana Department of Health and Hospitals on Facebook.


628 N. 4th Street  |  Baton Rouge, LA 70802  |  www.dhh.louisiana.gov

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