That comes in the form of a
portion of the payments going to nursing homes for Medicaid patients coming
from the Medicaid Trust Fund for the Elderly. The Fund was created
with federal government money to provide a vehicle to prop up reimbursement
rates, and since has received continued matching revenues from it as well
as from investment activities, fines paid by these providers, and specialty
license plate sales.
This creation occurred at the
height of nursing home influence in the Legislature, in an era that allowed
nursing homes in the state to ring up among the states some of the highest
proportion of their revenues from Medicaid while delivering among the highest
costs per bed, which continues to this day. This inefficiency grew worse with
the implementation of a program to pay them tens of millions of dollars for
thousands of empty beds while the crowning blow to taxpayers came when the case
mix methodology allowing this overgenerous state of affairs became enshrined in
state law in 2006.
All the while, judicial
imperatives argued for defunding nursing home expansion and service provision.
As a result of court settlements, Louisiana (and all states) must provide
services to the developmentally disabled, including those suffering from
age-related impairments, in the least restrictive setting; typically, home- and
community-based care. Previously, the state had been notorious for a strategy
of warehousing the disabled into nursing homes and had set the gravy train
rolling for these institutions. But as then state was making nascent efforts to
accomplish this mandate through its waiver program services, the nursing home
industry scrambled through its legislative allies to lock in as much of its
preferential treatment as possible.
Upon its assumption of power, the
Jindal Administration took a more critical view of this financing model, but
not enough to cause any real rollback, hoping instead that if it could begin
the process of managing the glut of nursing home beds for state Medicaid
payment purposes so that in several years demographics could catch up, both in
terms of raw numbers now lower than once projected because of increased
diversion into waiver services and in that the case mix would include a higher
proportion of private insurance payees. In part, this led to the strategy of
carrying the glut by draining the Fund.
Which the law clearly allows it
to do, despite the caterwauling of the nursing home industry that wanted to
have a fat reserve held indefinitely to increase the chances subsidization
would continue as long as possible. What particularly galls it on this account
is that in 2012 the industry muscled through a constitutional amendment to
prohibit “funds sweeps” out of it, a strategy used in budgeting to take
predictable flows of money coming into a dedicated fund with surpluses unlikely
ever to be spent on that dedicated purpose on the basis of genuine need and to redirect
them to higher priority spending needs, in the hopes of trying to keep the
balance up, but budgetary strategy kept draining it anyway.
In part, as a result of this
tactic (although depleting it as well is the ultimately correct presumption of
a Pres. Barack
Obama Administration and Democrat-run Congress that would and did cause
continued economic mismanagement that has resulted in the weak-to-nonexistent
economic recovery which produced a negative return on Fund assets) nursing home
interests pushed
through the Legislature last year a proposed constitutional amendment that
could take effect in fiscal year 2016 constitutionally rather than statutorily to
lock in, and with an automatic escalator, the reimbursement rate for them and
others, intentionally leaving out their “competitors,” waiver service
providers. If it passes this fall, this means either the one growing area of
service provision – waivers, over which legal mandates apply and are driving – the
reimbursement rates of which have been
cut the most in recent years will become the only real area in which cuts ever
can be made. This sets up the state for a budgeting nightmare that likely only
tax increases – literally letting nursing homes pick the pockets of taxpayers –
can resolve.
Whether by design to head this
off (it claims it is looking
at other funding sources courtesy of a law enacted last year that does not
limit its intake to the legal sources or federal funds), the Jindal Administration
budgeting choice here of taking $233
million from the Fund, forecast to leave this almost empty, encourages the
Legislature to revisit its overwhelming approval of the amendment. In doing so,
if the Legislature were to reject that pot of money (even as it authorized
drawing $183 million for this fiscal year), it would have find replacement
bucks, putting at risk the much-trumpeted
increases that some parts of state government would receive under the
proposed FY 2015 budget.
Unless legislators have the guts
to take on the resulting enmity, this reshuffle would spawn from the likes of
educators and state employees (which history suggests otherwise) by using this
money in FY 2015 and if the amendment passes, this sets up a tremendous funding
crisis during the election year FY 2016 coming next. And thus this may be
incentive for legislators to rescind approval of the amendment going to voters,
or for voters if educated on the matter to respond with amendment rejection to
avoid this ticking time bomb.
So if this is the unspoken gambit
of the Jindal Administration designed to torpedo a bad constitutional change,
it couldn’t have played this any better by making legislators a funding offer
they’ll find difficult to refuse. Even if it isn’t the intent, the happy
side-effect wrought will encourage doing the same. Thus, taxpayers should be
glad a fund created to keep the gravy train rolling for a special interest will
get emptied, and, if legislators don’t act, then will have every reason and
chance in the world not to permit even further privileging this special
interest at their own expenses.
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