BATON ROUGE, La. — House Republican lawmakers Friday blocked high-dollar contract extensions sought by Gov. John Bel Edwards’ administration for the managed-care companies that coordinate services for 1.5 million Medicaid patients in Louisiana.
The Democratic administration wants to keep the five deals in place for another 23 months beyond their January expiration date. But GOP lawmakers raised concerns about the price tag for the extension: $15.4 billion in federal and state cash.
Annually, the deals account for roughly one-quarter of the state’s operating budget.
Appropriations Chairman Cameron Henry and other lawmakers said they want the health department to try to squeeze more savings out of the contracts and respond to audits raising concerns about the companies’ performance.
“If we can save a dollar anywhere, I don’t see the harm in waiting to try to get there,” said Henry, a Jefferson Parish Republican.
Eighteen senators on the Joint Legislative Committee on the Budget unanimously backed the extensions, while House lawmakers including voted 18-6 against them. Nearly all the House Republicans on the committee, including Speaker Taylor Barras, refused the contracts.
Edwards said the extensions “were crafted with unprecedented attention to detail.” He criticized House Republicans as obstructionists.
“It does expose, once again, a lack of good faith on their part to move our state forward,” the governor said in a statement.
Henry expects another meeting on the proposals in December. He said he anticipates the deals eventually will win passage from lawmakers, but hopefully with tweaks.
“All we’re looking for here is time,” Henry said. “To say that you want to look at it a little bit longer doesn’t seem like an irresponsible thing to do.”
Edwards administration officials said they don’t know what House members want to see changed in the contracts. Jen Steele, Louisiana’s Medicaid director, said the only way to cut contract costs is to change services, which she said happens outside the contracting process.
Health department officials said refusal to extend the contracts would damage care for Medicaid patients, forcing Louisiana to return to a previous model of care they said would cost the state more money and offer fewer services.
“I think we have to plan for the worst,” Steele said.
Former Gov. Bobby Jindal moved to the insurance-based model for much of the Medicaid program in 2012, shifting from a previous system of directly reimbursing doctors and hospitals with a fee paid for each service rendered to a Medicaid patient. The private companies coordinate services for 90 percent of Louisiana’s Medicaid recipients — mostly pregnant women, children and adults covered by Medicaid expansion.
Lawmakers said they don’t want to scrap the managed-care system. That gives them few options since the health department says it doesn’t have enough time to rebid the work before the contracts expire.
Senate President John Alario, a Westwego Republican, said he doesn’t know where House members expect to find more savings.
“I’m not optimistic of any changes,” Alario said. “I think we’ll be facing the same thing in December that we saw today.”
Friday’s meeting was the second hearing on the extension request. Lawmakers earlier postponed a decision after saying they wanted more time to study the deals. The Edwards administration spent two weeks trying to sway committee members.
The effort worked with senators. But House Republicans questioned information released since then.
They cited a legislative auditor’s report that said the health department doesn’t properly monitor the managed-care companies to ensure they provide specialists to treat Medicaid patients’ mental health and substance abuse problems. They also referenced a task force studying Medicaid spending that has questioned whether prescription drugs prices have been marked up to help boost profits for private companies.
Henry pointed to comments Health Secretary Rebekah Gee made two weeks ago saying she doesn’t “have the staff that I should have to manage the number of contracts I do.”
Steele defended the contract extensions as including more accountability and linking millions in payments to health quality metrics. She said the department will do a more wide-ranging system redesign when it rebids the work.
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