BATON ROUGE-  Louisiana Department of Health Secretary Bruce D. Greenstein today recognized a $50 million funding deficit in Medicaid caused by unfunded increases in utilization. This deficit is being recognized in addition to the Department’s portion of the shortfall for FY 2010-11 also announced today.
The utilization increases are driven by growing enrollments in all segments of the Medicaid program, which provides a means of financing health care for low-income adults and their children, and people with certain disabilities. Since last year, there has been an overall 4.4 percent increase in the number of eligible people joining the Medicaid rolls.
A combination of reducing provider reimbursement rates, eliminating the CommunityCARE program, placing stricter limits on emergency room visits for adults, and restructuring certain financing methods are in line with the department’s strategy of increasing efficiency, preserving access and focusing funding on programs that improve the long-term health of enrollees. 
“We’ve known for some time that Medicaid was nearing a cliff. Increasing costs and utilization continue to stress the program,” Secretary Greenstein said. “This is why we have been committed to finding a better approach to delivering Medicaid in Louisiana – one that helps us improve outcomes and save money by focusing on preventive and primary care to keep recipients healthier and reduce the need for costly hospital stays and treatments.”
Greenstein added, “Earlier this week, I announced to legislators and stakeholders a new way forward as we develop a plan to implement a coordinated care strategy in Medicaid that will improve health outcomes while making the best use of available resources. This shortfall and these pending reductions demonstrate further how imperative it is that we work together to find new ways to pay for care to maximize the value of every dollar we spend and improve health outcomes.”
Medicaid is implementing a series of provider rate cuts, including a 2 percent reduction in rates for providers who would fall under the coordinated care model currently under consideration. These include primary care physicians, home health providers, hospitals and certain specialists. Other providers not included under the coordinated care model will receive a 5.8 percent rate reduction. These include such programs as home and community-based services. Pharmacy will receive a 3.1 percent reduction in rates. Additional savings are achieved in the pharmacy program by moving to a four prescription limit for adults with physician override.
Medicaid is also eliminating the Primary Care Case Management Program known as CommunityCARE that was originally created to provide a Medical Home for Medicaid recipients. “This program has failed to show the results promised and is a perfect example of why this model of managed care in Medicaid doesn’t work,” Greenstein said. “For our $6 million per year investment in State General Funds, CommunityCARE has done nothing to make people healthier. In fact, we’ve actually seen reductions in some key health measures under the program. We can’t continue to invest in programs that do not deliver value by improving the health of the people they serve.”
Other savings in Medicaid are achieved in the plan through:
-Recognizing funding not required in the Medicaid buy-in program for Medicare Part D and in the Uncompensated Care program.
-Standardizing the number of allowed emergency room visits for adults.
-Delaying the implementation of a planned Assisted Living Waiver.
-Using funds associated with the LSU DSH audit rule. 
-Changing the methodologies for paying hospitals for serving certain fragile children under age 5.
“The health care landscape will change dramatically over the next several years,” Greenstein said. “It is incumbent upon us to innovate and constantly seek better ways to ensure our vulnerable populations get the care they need and to do so by living within our means.”
The Louisiana Department of Health 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 LDH, visit For up-to-date health information, news and emergency updates, follow DHH’s blog, Twitter at and search for the Louisiana Department of Health on Facebook.