Louisiana’s Medicaid managed-care contracts are a high-dollar expense for the state budget that have seen little legislative scrutiny since former Gov. Bobby Jindal privatized much of the Medicaid program five years ago.
Now that Gov. John Bel Edwards has inherited the deals, lawmakers are digging more into the spending — right as the Edwards administration wants to continue the arrangements for another 23 months at a cost of more than $15 billion in federal and state cash.
A task force created by lawmakers is searching for signs of waste in Medicaid spending. Audits raising questions about dollars paid improperly in both the Jindal and Edwards eras have raised concern.
No one seems to want to scrap the insurance-model system, but the Edwards administration can expect continued inspection of contracts that are among the largest in state government, amid concern that too few people are tracking the money.
Lawmakers this month postponed a decision on whether to extend the lucrative contracts for the managed-care companies, saying they wanted more time to study the deals. Another House and Senate budget committee hearing on the issue is set for Friday.
“When you come before a committee and you’re asking for an extension on a performance-based contract, I’d like to see some results before I can say, ‘Boy, that’s a great idea for the state,’” said Sen. Jack Donahue, a Mandeville Republican who requested more information from the Department of Health about the companies’ performance.
Jindal moved to the privatized, insurance-based model for much of the Medicaid program 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.
Five 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 Edwards’ Medicaid expansion. (The networks don’t cover most services for disabled and elderly Medicaid patients.)
The Edwards administration wants to continue the current managed-care deals, which began in 2015, through December 2019 while seeking new bids for the work.
Senate Finance Chairman Eric LaFleur, a Ville Platte Democrat, said he and other lawmakers didn’t dissect the deals enough when they were first put in place. He criticized the Jindal administration contracting process as too hurried, with too few quality assurances.
“I think we were in a rush to privatize to put that on (Jindal’s) checklist. That’s not to say it’s not better. I think care is probably better,” LaFleur said. “But overall the process by which we picked these companies is not something a shrewd businessman should do.”
However, LaFleur said uprooting companies quickly now could jeopardize access to services.
Health department officials say the shift to managed care lessened growth in Medicaid costs by better coordinating patient care. Health Secretary Rebekah Gee said the contract extensions include more accountability and her department will do a more wide-ranging system redesign as it rebids the work.
Meanwhile, the task force studying Medicaid spending questions whether pharmacists are getting low reimbursements to help boost profits for private companies, and Legislative Auditor Daryl Purpera’s office has continued to document misspending.
Purpera’s office said managed-care companies were paid for people who had moved away from Louisiana. Auditors found duplicate payments for services and payments for services and tests that shouldn’t have been covered. The latest audit said the health department doesn’t properly monitor the companies to ensure they provide enough specialists to treat Medicaid patients’ mental health and substance abuse problems.
Overall, the dollar figures in the audits are small in a Medicaid program that costs $12.5 billion this year, and many findings stem from the Jindal administration’s tenure.
Current leaders of the health department say they have worked to bolster oversight. But they also undermine their own case, repeatedly saying that Jindal-era staffing cuts have left the agency with few employees to monitor private companies managing care.
“I frankly do not have the staff that I should have to manage the number of contracts I do,” Gee told lawmakers. “If I ran a private business, if I ran a Google, there is no way I would do it with so few people because it’s wasteful.”
EDITOR’S NOTE: Melinda Deslatte has covered Louisiana politics for The Associated Press since 2000. Follow her at http://twitter.com/melindadeslatte