BATON ROUGE — Lawmakers postponed a decision Friday on whether to extend lucrative contracts for the five managed-care companies that coordinate health services for most state Medicaid patients, saying they want more details about deals that are among the largest in state government.
After three hours of discussion, the Joint Legislative Committee on the Budget delayed a vote until a special hearing, likely to be scheduled next week. Lawmakers say they need more time to study contract extensions estimated to cost $15.4 billion in federal and state dollars over 23 months.
“It may be a wonderful thing, and I hope it is. But I don’t know today that it is,” said Sen. Jim Fannin, a Jonesboro Republican.
Rep. Jack McFarland, a Winnfield Republican, said annual spending on the contracts comprises about one-third of the state’s $28 billion operating budget.
“We want to make sure there’s not something in the details we’re missing,” he said.
The Louisiana Department of Health said it distributed the contract proposals, along with supporting documents, to lawmakers two weeks earlier. But agency officials said they’d sit with anyone who wanted more information.
“Absolutely this is a lot of money, and you all deserve your time to hear this out,” said Health Secretary Rebekah Gee.
Enacted by former Gov. Bobby Jindal’s administration, the contracts began in 2015 and will expire in January. Gov. John Bel Edwards’ administration is proposing to continue them through December 2019 while working to seek new bids for managed-care work.
Gee said the contract extensions have been rewritten to include more accountability and link more payments to health quality metrics. For example, she said the current contracts have $10 million tied to certain quality measures while the extensions bump that to $250 million.
“That’s real money, and they don’t want to lose it, and that really incentivizes them to improve quality,” she said.
Most of the questioning came from Republican lawmakers, who sought more information about the performance metrics used, the decision-making involved in extending the contracts for 23 months rather than a shorter period and the method for estimating costs.
The private managed-care companies coordinate services for 90 percent of Medicaid recipients, nearly 1.5 million people — pregnant women, children and adults who receive the government-financed coverage through the Medicaid expansion program.
Louisiana pays a per-member, per-month fee for each Medicaid patient enrolled in a health plan with the companies. The enrollees get services through a network of primary care doctors, specialists and hospitals.
Jindal moved to the insurance-based model in 2012, shifting from Louisiana’s previous system of directly reimbursing doctors and hospitals that cared for Medicaid patients with a fee paid for each service rendered. Health department officials said the shift lessened growth in Medicaid costs by better coordinating care for patients.
The managed-care networks don’t cover most services for disabled and elderly Medicaid recipients who are in nursing homes or who receive home- and community-based care.