Thursday, June 20, 2024

Doomsday looms for hospitals with budget cuts being discussed

by BIZ. Staff
By Kaylee Poche and Ryan Noonan, LSU Manship School News Service

BATON ROUGE — After the legislature’s failure to agree on revenue-raising measures in the special session, uncertainty is engulfing the health care system as Gov. John Bel Edwards’ proposed “doomsday” cuts are coming closer to a reality.

The House Appropriations Committee met Tuesday to discuss the potential cuts to close the $994 million budget hole once a temporary sales tax expires July 1.

The Department of Health has received notices from several of its private partners of their plans if the cuts materialize.

Referring to the state’s private health partners in Shreveport, Commissioner of Administration Jay Dardenne said, “We have to keep that ball in motion–they recognize that.” But, he added, the private partners “also recognize that the budget does not contemplate being able to make the payments,” and they would not be able to manage University Health hospital without them.

University Medical Center would eliminate medical education, and Our Lady of the Lake would end its graduate medical program.

Several hospitals would be forced to reduce their staffs, laying off between 800 and 1,000 employees in Lafayette and 350 to 400 employees in Lake Charles.

At the meeting, Dardenne called on mostly Republican legislators who preferred budget cuts to revenue-raising measures to support specific cuts.

“For those of you who have been saying we should cut the budget, show the people of Louisiana your cuts, and examine the impact,” Dardenne said. “I will challenge all of you to find 692 million that you are willing to put your name on.”

While an extra penny of sales tax expires July 1, the real deadline is even sooner for certain cuts. Any cuts to Medicaid going into effect on July 1 must be submitted to the federal government for approval by May 1, and health professionals would need to be notified by April 1, a month earlier. From there, the federal government would have about 60 days to approve the changes.

In January, Gov. John Bel Edwards presented an executive budget which included a $656 million reduction in state funding to the Department of Health–a cut which would result in a loss of nearly $1.6 billion in federal matching dollars. Funding for nursing homes, safety-net hospital and clinics, mental health and substance abuse services and some Medicaid programs would all be reduced under the proposed budget.

Edwards has said he was not in favor of the cuts but was required by the state’s constitution to propose a balanced budget based on estimates at the time.

The inability to solve the budget deficit in the special session means that the Legislature will have to make cuts during the regular session, without the ability to raise additional state dollars.

Devon Sanders contributed to this report.

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