Medicaid is complex, because private insurers paid by the program provide health coverage for more than 890,000 people in Louisiana. Yet the gap in understanding between the state agency overseeing Medicaid and the Legislative Auditor’s Office is worrisome, because the Legislature and the public need a solid assessment of significant changes made under Gov. Bobby Jindal.
A report from the legislative auditor said the Jindal administration’s positive report — is there any other kind from state government? — on the status of Medicaid privatization lacks information supporting “global assertions” of cost savings and improved health outcomes.
The report’s complaint is fairly straightforward, in that the Department of Health and Hospitals largely based its January report to the Legislature on data provided by the insurance companies participating in Bayou Health plans for Medicaid recipients.
There are two issues. One is that the privatized management of Bayou Health plans is not independently assessed. In addition, comparisons between traditional Medicaid and the new privatization do not use apples-to-apples data.
“This lack of comparability renders most comparisons of Bayou Health data to legacy Medicaid data skewed and not useful,” according to the auditor’s report.
The report has been dubbed the Bayou Health Transparency Report. State law requires the legislative reporting, which was initially opposed by the administration.
“The department continues to disagree with the basis of many of the findings,” Medicaid director Ruth Kennedy wrote of the report.
Kennedy said the state Department of Health and Hospitals has entered into a contract with a CPA firm to verify the completeness and accuracy of data provided by the private insurers.
The legislative auditor’s review comes as the state is soliciting proposals for new contractors. The state is shifting direction for Bayou Health, requiring that all plans — now a mix of differing approaches to insurance — insure recipients on a “capitation” model, or per-head monthly premium.
That seems an effort to squeeze more savings from the program, but at the same time we note that Kennedy’s agency has written in more performance standards by which the plans will be judged.
That’s a positive development, we think. It is health care outcomes that are the most important indicator, although cost savings are important.
Most of Bayou Health recipients are pregnant women and children, but Medicaid coverage via private insurers is likely to expand eventually. Many people in nursing homes are covered by Medicaid, and Bayou Health’s managed care model is likely to come to those businesses.
While Jindal and the Legislature have opposed expanding Medicaid coverage of the working poor, that is also likely to come in time, because even the subsidized insurance of the exchanges of the Affordable Care Act is not affordable enough for those in minimum-wage jobs.
We would like to see more agreement about the facts, even if opinions differ on the wisdom of the Bayou Health initiative. And we, like Jindal, would like to see Medicaid coverage that generates better health outcomes as well as cost savings.
But how are we, or legislators, to know if there remains, after six months of chewing over the “transparency report,” such a wide gap in analysis?