Jindal cuts LSU hospitals to help balance health care budget

The Jindal administration unveiled part of its plan to close a nearly $860 million hole in the state’s health insurance program for the poor Friday, with the brunt of the reduction falling on the LSU hospital system.

More than $300 million of the $522.5 million in cuts announced in a late afternoon news conference took money for care of the uninsured used to operate the 10 hospitals, which are training grounds for the state’s future physicians, nurses and other health care professionals.

Threats of cuts of much less magnitude have prompted LSU officials in the past to warn that many of the hospitals would have close.

Commissioner of Administration Paul Rainwater said the administration hopes to close the remainder of the hole with funds that may be left over when the books finally close on the fiscal year that ended June 30.

If that additional revenue does not materialize by August or September more cuts to the state’s $7.7 billion Medicaid program would have to occur, he said.

“The bottom line is we will have a balanced budget,” said Rainwater.

The rate the federal government will pay toward Louisiana’s Medicaid program is changing from 71.92 percent to a projected 65.51 percent.

The change prompts a $859.2 million reduction to the state’s $7.7 billion Medicaid program. The change in federal participation occurs Oct. 1 with the beginning of the new federal budget year.

The move caught the Jindal administration by surprise, occurring after Louisiana’s legislature passed a new budget for the state fiscal year which began July 1. The Louisiana Medicaid reduction was a part of a compromise congressional federal transportation appropriations bill that also insured that Louisiana and other Gulf states would share in money from fines related to the BP oil disaster.

As it became apparent that the funds would be lost, Rainwater said that he and state health chief Bruce Greenstein had begun work on “a plan that continues to reform and restructure the way the state delivers health care services.”