Now that Louisiana’s Medicaid expansion has taken hold and we are seeing the results of this new coverage across the health care system, the Louisiana Department of Health (LDH) is beginning to focus on other ways we can work with health providers to ensure that our residents have access to high-quality care and, importantly, to ensure the sustainability of the Medicaid program and the delivery system that serves our Medicaid and uninsured families. Louisiana’s need for long-term, stable funding mechanisms to maintain access to essential inpatient and outpatient services for all Louisianans is a priority.

In Louisiana, more than half of total Medicaid dollars that flow to hospitals are in the form of hospital supplemental payments. New federal Medicaid rules, growth in managed care and a renewed focus on value over volume puts supplemental payments at risk, prompting a proactive effort to change how Louisiana Medicaid pays for health care. As early as State Fiscal Year 2018, LDH will no longer be able to grow supplemental payments enough to fund hospital program growth, making the development of a sustainable alternative a top priority for Calendar Year 2017.

Through a collaborative process, LDH is undertaking an effort to assess Medicaid funding mechanisms to ensure a more sustainable and equitable payment system in the future. Stakeholder input is critical to moving forward and guiding the development of sustainable Medicaid hospital payment alternatives. LDH intends to develop and communicate for broad awareness a common understanding of the current Medicaid payment system; conduct a hospital payment study to understand the utilization of hospital services by the Medicaid and uninsured populations in the state; and use the findings of this study to lay the foundation to inform considerations of future hospital payment methods through a public process.

In November, LDH leadership met with hospital stakeholders to discuss the need for hospital payment transformation (refer to “The Case for Hospital Payment Transformation” file below). In January, LDH will bring together providers and other stakeholders in the form of stakeholder work groups to raise awareness about the current Medicaid payment system, review the results of the hospital payment study, and begin to gain feedback on hospital payment alternatives as well as broader delivery and payment system changes.

To initiate the hospital payment study, LDH is requesting Louisiana hospitals to provide utilization data specific to service use by individuals with no third party coverage. LDH will use this data, in conjunction with claims data for the Medicaid population, to examine utilization trends, changes in service mix, reimbursement rates and cost coverage. The details of this data request and supporting documentation can be found below under Related Files. Support for this data request is provided by Mercer Government Human Services Consulting and Burns & Associates. LDH requests responses by December 30, 2016, and very much appreciates your time and attention to this effort. Questions regarding this request can be directed to:

Technical Questions

Mark Podrazik

Burns & Associates

mpodrazik@burnshealthpolicy.com

All Other Questions

LaShawn Junius

Louisiana Department of Health, Bureau of Health Services Financing

LaShawn.Junius@la.gov