The state health agency is running a $516.1 million budget shortfall, but officials said Friday they have identified “internal solutions” to close the gap.

The fix won’t impact current Medicaid services or the provider fees hospitals, physicians and other health care providers receive for delivering care, state Department of Health and Hospitals Secretary Kathy Kliebert said.

But once again, DHH will “freeze” the authorized slots for the developmentally disabled seeking home- and community-based services, Kliebert said. There’s insufficient money earmarked for the program in the current year’s budget, she said.

“Our goal was not to affect anybody receiving services,” Kliebert said. She said cuts in provider reimbursements “wouldn’t be viable.” Reductions could hinder access to care and run afoul of federal regulations.

DHH issued a news release Friday afternoon announcing the anticipated $516.1 million budget shortfall. The projection is based on the first quarter of Medicaid spending in the fiscal year that began July 1. Louisiana’s Medicaid health insurance program for the poor and uninsured is budgeted for $8 billion.

“The big thing we saw this year was an increase in Medicaid enrollment, utilization and cost of health care in the market,” Kliebert said. Medicaid enrollment jumped about 80,000, or 9 percent. It now stands at 1.4 million people.

“This is about more people who have been added on,” she said.

The state budget started out short of funding for home- and community-based services for the developmentally disabled. It earmarked dollars for a specific number of people who could be served but did not provide funds to pay for a full year of providing the services. So, Kliebert said those on the waiting list will have to stay there, barring emergency situations or changes in their circumstances.

Another smaller shortfall is in the program where the state pays some Medicare costs for people who also are eligible for Medicaid.

DHH had to come up with $186.2 million in state funds to close the $516.1 million Medicaid funding gap. The state dollars bring in $329.9 million in federal funds.

Most of the gap is closed with extra state dollars — $128.1 million — from state mental health hospitals and LSU hospitals that went unused in prior fiscal years. The dollars were not anticipated in the current year’s budget.

In addition, there is an increase in provider fees paid to DHH by the Bayou Health plans, nursing homes, intermediate care facilities and pharmacists. Another smaller amount comes from reduction of a hospital service district program because of privatization of West Jefferson Medical Center.

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