Today, the Louisiana Division of Administration and the Louisiana Department of Health outlined a plan to address funding reductions included by the Legislature in the state’s final operating budget for fiscal year 2014, which begins July 1.  Without these actions, LDH projects that it would face an approximately $25.9 million state general fund shortfall at current operating levels. 

The reduction plan was constructed to protect critical services by identifying administrative and programmatic efficiencies. Reductions are spread across department administration and program offices, local governing entities such as Human Service Districts, and the Louisiana Medicaid program.  

LDH Secretary Kathy Kliebert said, “We are focused on managing our budget and resources as effectively as possible to support the needs of Louisiana residents across the state. Coupled with these reductions, LDH continues to carefully monitor utilization levels across its programs and make adjustments where necessary to protect critical services provided to our most vulnerable residents.”

The reductions are outlined below by office:

Office of Aging and Adult Services ($948,895 SGF; $1,165,756 Total 13 TO, 5 Non-TO). OAAS will achieve savings through reduction, elimination or renegotiation of certain professional service contracts. The office will also eliminate 18 positions, including a Deputy Assistant Secretary position whose responsibilities have been consolidated with another position in the Department. 

OAAS will achieve savings through further realignment and reduction of regional administrative staff and Adult Protect Services (APS) positions. APS investigators will continue to investigate allegations of abuse or neglect in institutional facilities and in community settings. Complaints about specific licensed providers will now be investigated by LDH Health Standards staff. OAAS will also capture savings through the Medicaid payments budget as the Department implements utilization controls.

Office of Behavioral Health ($2,965,130 SGF; $2,965,130 Total 0 TO). OBH will achieve savings through additional self-generated revenue and a recalculation of the administrative cost component of its contract with the Louisiana Behavioral Health Partnership (LBHP) Statewide Managing Organization (SMO), with no impact to service delivery. Other savings identified by OBH include a higher use of generic prescription drugs at its facilities and a postponement of certain equipment acquisitions and maintenance. 

Office for Citizens with Developmental Disabilities ($137,414 SGF; $370,988 Total 6 TO). OCDD savings will be achieved through the elimination of six vacancies. Other savings will be captured through the Medicaid payments budget as the Department implements utilization controls. 

Office of Public Health ($1,036,087 SGF; $1,036,087 Total 0 TO). OPH will generate savings by leveraging other available funds for vital records contracts, realigning staff functions in the molluscan shellfish and immunization programs, and reducing certain Children’s Special Health Services contracts with no impact to services. OPH will also reduce contract positions for the Nurse Family Partnership (NFP) program, which will have a minimal impact to the outcomes of the program. Children and families enrolled in the Medicaid Bayou Health program may be eligible for case management services through their health plans.  

Office of the Secretary ($1,244,727 SGF; $1,244,727 Total 15 TO). The Office of the Secretary will achieve these savings through the elimination of various vacant positions, some of which will come from the Health Standards Division.

Medicaid Administration ($1,191,675 SGF; $2,383,350 Total 10 TO).  Medicaid will achieve savings through the reduction of contract funding related to the now delayed implementation of a new Medicaid Management Information System (MMIS) and the elimination of vacant positions. 

Medicaid Provider Payments ($14,400,000 SGF; $38,600,000 Total). Medicaid will achieve these savings through several strategies, which include:

1. Effective July 1, 2013, LDH will reduce Medicaid dental provider rates by three percent. This will bring Louisiana’s dental reimbursement rates closer in line to other state Medicaid programs. Louisiana’s rates will still be higher than neighboring states’ rates for the majority of dental services.

2. LDH will make adjustments to the Upper Payment Limit (UPL) and LINCCA programs.  

3. LDH will implement heightened utilization controls for high-cost programs provided through federal waivers. No individuals currently receiving services will be impacted. 

Developmental Disabilities Council ($3,548 SGF; $3,548 Total 0 TO). The Developmental Disabilities council will reduce contracts that provide information and referral services, peer-to-peer support, and education and training. This overall reduction will be made across contracts with nine agencies, thus reducing the overall impact on one single contract.

Louisiana Emergency Response Network (LERN) ($50,302 SGF; $50,302 Total 0 TO). LERN will not execute a professional services contract for a part time position related to the planned merger with the Bureau of Emergency Medical Services (BEMS) that did not occur in the recent legislative session.  

Human Service Districts and Authorities ($3,915,161 SGF; $3,915,161 Total 13 Non-TO). The districts operate within their own governance and executive leadership, with the implementation strategy for reductions determined locally. Districts and authorities have targeted reductions in an effort to maintain critical services and minimize the impact on individuals they serve.  Each will achieve savings through various techniques such as supply and travel reductions, staff reductions, delays of planned service expansions, contract reductions, attrition savings and increased ability to bill third-party payer sources.