After stalling the contracts since October, House Republicans lifted their opposition Thursday to multibillion-dollar extensions sought by Gov. John Bel Edwards for the private companies that manage care for 1.5 million Louisiana Medicaid patients.
Senators and House members on the Joint Legislative Committee on the Budget approved the $15.4 billion deals without a single objection in the fourth hearing on the issue, ending a stalemate that had raised questions about how Medicaid services would be delivered in February.
Appropriations Committee Chairman Cameron Henry, the House Republican who led the objections to the contract extensions, said the addition of language explicitly giving the legislative auditor oversight of the deals made lawmakers more comfortable with the contracts.
"Overall, what we were able to do by not agreeing right away with what you all wanted to do is just to put some language in the contracts that makes everybody feel — the taxpayers feel — a little bit better than we did before," Henry, of Metairie, told the Edwards administration. "We didn't rubber-stamp it. We just allowed the process that we have in place to work."
The Edwards administration initially refused to add the language into the contracts, with Edwards' lawyer Matthew Block saying current law allows the auditor's office to review the records. But the administration changed course and agreed to include the provision in the extensions up for consideration Thursday.
"I think it's been a good, healthy exercise in a democratic process," said Senate President John Alario, a Republican from Westwego. "I think those who had some concerns have expressed them, and I think they've been addressed."
The extensions will keep in place five companies that manage care for 90 percent of Louisiana Medicaid patients. The current contracts were set to expire Jan. 31.
Edwards called Thursday's action a "good day for the people of Louisiana."
"While it seems to me that the approval process became unnecessarily mired in political gridlock, I am very grateful for the good judgment shown by the committee," the Democratic governor said in a statement.
Senators previously had voted to approve the contracts. If House Republicans hadn't reversed their opposition, Edwards planned to enact the deals through an emergency process.
Attorney General Jeff Landry, responding to questions from 16 Republican state senators, had warned that contracts done through the emergency statute could be subject to legal dispute. And the emergency contracting plan provoked legislative criticism that Edwards was improperly sidestepping them in spending decisions.
"I think if we've learned anything over these last few months, it's that the Legislature does want to be more involved," said state Sen. Sharon Hewitt, a Slidell Republican.
The extensions will retain the managed-care companies for 23 months beyond the expiration date, keeping them in place through Dec. 31, 2019, while the Louisiana Department of Health seeks new competitive bids for the work after that.
The current managed-care contracts were negotiated by former Gov. Bobby Jindal's administration. The Edwards administration tweaked the terms in the extensions, adding what it says are more dollars tied to performance and more quality measures.