WASHINGTON — Louisiana officials are trying to fend off an estimated $567 million decrease in federal Medicaid money.
The federal government and state disagree on the interpretation of a timing provision. The federal government is arguing that the half-billion dollars should not be included in the federal fiscal year that begins Oct. 1, 2012. Louisiana Health and Hospitals Secretary Bruce Greenstein and U.S. Sen. Mary Landrieu disagree, saying the adjustment should be included. Landrieu added the adjustment to the federal health-care overhaul law.
Under the federal interpretation, state government would have to come up with $567 million more to care for the poor and uninsured, according to a report released Monday by the Federal Funds Information for States, called FFIS, a service of the National Governors Association and National Conference of State Legislatures.
Landrieu obtained what was estimated at the time to be about $300 million for the state in the health-care law approved by President Barack Obama. The money was granted after Landrieu successfully argued that the federal match to the state insurance money for the poor was based on faulty per capita income figures.
The Landrieu provision calls for the Medicaid money to be given to benefit any state for which the president has declared a major disaster during the preceding seven fiscal years. Louisiana was the only state to qualify.
Landrieu wrote a letter to U.S. Secretary of Health and Human Services Secretary Kathleen Sebelius on Monday saying that the time calculated for Hurricane Katrina should qualify the state for another year.
Katrina made landfall on Aug. 29, 2005. Using that seven-year mark, the state support would expire. However, Landrieu is contending that the disaster lasted through Nov. 1, 2005, which would qualify Louisiana for one more year of support.
“It is clear to me and to the state that the declaration of the disaster would include the entire period in which the state was in a period of disaster from Aug. 29 through November 1, 2005,” Landrieu wrote to the federal Health and Human Services.
DHH Secretary Greenstein said Wednesday that his office has been talking with staffers from the Centers for Medicare and Medicaid Services that handle the program for the federal health agency. Those staffers have agreed with the state’s interpretation and Greenstein is waiting for word from the HHS department, he said.
“It’s pretty clear,” Greenstein said. “I hope HHS sees it that way too.”
The heightened concern over a drop in the state’s Medicaid dollars was initiated in the FFIS report released Monday. The group that tracks the fiscal impact of federal budget and policy decisions on state budgets and programs reported that Louisiana would lose the money because HHS has indicated that the state would not qualify for the extra Medicaid dollars in the 2013 fiscal year, which begins Oct. 1, 2012.
“This publication, which we know is not official, has created confusion and worry within the state,” Landrieu wrote.
At the time of the health-care law’s passage, the Landrieu provision sparked controversy. Landrieu, who had not committed to supporting the Obama plan, did so at the same time she secured the $300 million.
Critics called the money the “Louisiana purchase” and Landrieu caught flak from national political commentators. Landrieu maintained that her vote was unconnected to the Medicaid award.
In 2010, the state faced a 20 percent drop in its Federal Medical Assistance Percentage, known as FMAP, which is based on average income figures in the state for three prior years.
Louisiana officials argued the income level used for the state was inflated by hurricane recovery money and that the state should not be penalized for the temporary infusion of cash.
The federal match to the state dollars in 2010 stood at 81.5 percent, buoyed by Obama stimulus money but was set to drop to 62 percent due to the income calculations. With the Landrieu provision, the rate increased to 69.78 percent.
Under the 2013 fiscal year calculation, Louisiana’s FMAP would drop to 61.24, the FFIS report said. The federal fiscal year runs from Oct. 1 through Sept. 30.
Louisiana spends $6.5 billion a year through Medicaid, the government’s health insurance program for the poor, mostly children, the elderly and disabled. The program covers some 1.2 million people.
Landrieu said she hopes the federal government will work with the state.
“You have been so attentive to the needs of our most vulnerable population who are still struggling to recover and we are indeed grateful,” Landrieu wrote.