Louisiana’s health agency is taking steps to close a projected $413 million hole in the state’s Medicaid program, state Department of Health and Hospitals Secretary Bruce Greenstein said Tuesday.

“We will be balancing the budget,” Greenstein said.

Greenstein said the agency is addressing the deficit by using, in part, cash reimbursements received from the federal government and implementing changes in some program policies to slow growth and reduce spending.

The Medicaid rates that doctors, hospitals and other health-care providers get for services are not being cut, Greenstein said.

The steps came after DHH’s midyear forecast projected a $126.7 million shortfall in state revenue in the Medicaid health insurance program for the poor.

Without the cash, the state could not draw down another $286 million in federal funds.

Louisiana’s Medicaid budget is $6.8 billion.

Some 1.2 million of the state’s residents, mainly children, the elderly and developmentally disabled, are covered by it.

Greenstein said DHH has identified $120 million returned to the state as a result of resolution of disputes with the Center for Medicare and Medicaid Services, or that can be freed up by changing the means of financing connected to certain expenditures.

In addition, Greenstein said the agency will implement initiatives to slow the growth of certain health-care programs.

Among the changes will be:

  •  Better management of prior authorizations for the Mental Health Rehab program.
  •  Keeping closer tabs on the number of people going in and out of waiver programs that provide in-home and community support for the developmentally disabled and the elderly.
  •  Recouping money from some physician practices that failed to make “a good faith effort” to attain national accreditation required to get extra payments for providing medical homes for children.

DHH said the deficit came about because of increases in the volume of services being provided.

Medicaid’s rate of growth has slowed somewhat, except in “some of the highest costs areas, such as among people with certain disabilities,” according to a DHH news release.

As the state moves to a new health-care delivery system for the poor next year, Greenstein said Medicaid budget forecasts will come “closer to the mark.”

Greenstein said the new “coordinated-care networks,” which move away from a “fee-for-service” setup, should bring “more budget predictability.”

In one model, insurance companies that operate the networks of physicians, hospitals and other providers will get paid an insurance premium just like in the private sector.