Senator David R. Heitmeier

With the looming state budget crisis of nearly $2 billion, every avenue of relief is being explored including an innovative idea of maximizing Medicaid funds Louisiana receives from the federal government.

Act 434 of the 2010 Legislature was authored by State Senator David R. Heitmeier, O.D. and could mean as much as $10 million to West Jefferson Medical Center and $5 million to East Jefferson General Hospital. Both facilities experienced financial setbacks following Hurricane Katrina with a rise in indigent patients formally receiving care through the state’s charity system severely impacted by the storm.

Heitmeier’s legislation authorized Louisiana’s Department of Health and Hospitals (DHH) to develop mechanisms to leverage additional Medicaid dollars by approving a physician UPL for service district hospitals. An Upper Payment Limit (UPL) must be approved by the Centers for Medicare and Medicaid Services (CMS). That amount is the difference that hospitals are paid by Medicaid reimbursements and the average charges commercial carriers normally bill for similar hospital-employed physicians’ services.

“The present reimbursement plan actually encourages the state not to adequately reimburse community hospitals like [East Jefferson General Hospital and West Jefferson General Hospital],” Heitmeier says. “The plan we want to put into effect will allow the state to pay a higher rate of reimbursement to hospitals for doctors’ services at those hospitals.”

 ”At present, about a dozen community hospitals across the state have a combined UPL of as much as $50 million in uncompensated care every year,” Heitmeier continued.   Heitmeier says DHH is optimistic the plan will be approved this month and could reach hospitals by January.

Heitmeier’s enthusiasm is shared by Nancy R. Cassagne, CEO of West Jefferson Medical Center. “Sen. Heitmeier has been a true champion for West Jefferson and has fought tenaciously to get funding for our community. Literally within weeks of taking office, he made it a priority to learn how the state funds local community hospitals and quickly recognized the disparities in how we are paid. Through many meetings and phone calls and his unwillingness to accept status quo, the Senator has worked hard to change practices at the Department of Health and Hospitals that lacked equity for all hospitals. Further, he passed key legislation to assist in leveling the playing field.”

Uncertainty remains at the state level on the impact of the federally mandated Affordable Care Act signed into law in March, 2010. A bill authored by Representative Kirk Talbot and signed into law prohibits any state citizen from being mandated to purchase any type of health insurance.

Recognizing the conflict between this and federal law, Heitmeier amended the bill in a senate committee to protect the state from incurring any financial obligations clarifying that federal law always supercedes state law.