Fox News Watchdog

A November 30 Washington Times editorial falsely claimed that an amendment to the Senate health care bill limiting a scheduled reduction to Louisiana’s Medicaid reimbursement rate would increase the federal government’s contribution to Louisiana’s Medicaid obligation. In fact, under the Senate amendment, Louisiana’s federal medical assistance percentages (FMAP) rate would reportedly decrease from 81.48 percent to 68.04 percent.

Wash.
Times: Landrieu’s
“big payday” would increase federal outlays to Louisiana

Wash.
Times:
“Mrs. Landrieu’s big payday” means that
“each $1 Louisiana spends will be matched by $4 in
federal funds. In a November 30 editorial,
The
Washington Times claimed that Sen. Mary Landrieu (D-LA) “didn’t even blush about selling her vote”
for the Senate health
care bill, calling the Louisiana Medicaid fix “Mrs. Landrieu’s big
payday.” The editorial went on to falsely claim that the proposal would increase
Louisiana’s Medicaid reimbursement rate: “Right
now, each dollar that Louisiana’s Medicaid program spends is matched
by $1 in federal funds. If Senate Majority Leader Harry Reid’s bill passes, each
$1 Louisiana
spends will be matched by $4 in federal funds.” [The Washington Times, 11/30/09]

Under Senate bill, Louisiana’s Medicaid
assistance reportedly still set to decrease

Louisiana FY09
reimbursement rate: 72.47 percent. According to the
Department of Health and Human Services (HHS), the federal government provided 72.47 percent of Louisiana’s Medicaid
spending for the fiscal year that concluded September 30, 2008. HHS initially
set Louisiana’s Medicaid reimbursement rate at
71.31 percent for the fiscal year that concluded September 30, 2009. The
American Recovery and Reinvestment Act reinstated fiscal year 2008 rates for states scheduled
to receive a lower reimbursement rate for fiscal year
2009.

Recovery
act temporarily
instituted an additional
increase
in reimbursement. The American Recovery and
Reinvestment Act passed in February also provided a temporary general increase of 6.2 percent in FMAP for each state. The bill provided
further assistance for states with higher unemployment rates. [American Recovery and Reinvestment
Act]

Times-Picayune: “[I]f the bill
as written becomes law,” Louisiana’s FMAP would decline from current
effective rate of
81.48 percent to 68.04 percent. In a November 20 article, the New
Orleans Times-Picayune reported
on Landrieu’s amendment to reduce the scheduled cut to Louisiana’s reimbursement
rate and stated that the “net result”
of temporary stimulus measures “is that the federal government is
paying 81.48 percent of Louisiana’s Medicaid costs,” but that “if the bill as
written becomes law, Louisiana’s FMAP percentage in 2011 would be 68.04 percent
instead of dropping to 63.61.”

From The Times-Picayune:

FMAP refers to the federal medical
assistance percentages, or the percentages of state Medicaid spending the
federal government covers.

Poorer states as measured by per
capita income, like Louisiana, get more federal help. However,
Louisiana is
facing a huge reduction in federal assistance in fiscal 2011, because the FMAP
percentage for that year is based on per capita income for calendar years
2006-2008, in the aftermath of Hurricanes Katrina and Rita. Louisiana experienced an
unusual spike in per capita income in those years, in no small measure because
of a large but temporary infusion of government, insurance and other recovery
dollars pouring into the state.

The result is that Louisiana’s FMAP
percentage is going to drop 4 percentage points, from 67.61 percent in to 63.61,
way more than any other state.

“That’s huge,” said Trinity Tomsic,
a Medicaid analyst with Federal Funds Information for States, which analyzes the
fiscal impact of federal budget and policy decisions on
states.

But it gets much worse for
Louisiana.

The stimulus plan increased the
share of Medicaid paid by Washington for 27 months — through the end of
next year — while sparing states any reductions in their FMAP formula in the
meantime.

The net result is that the federal
government is paying 81.48 percent of Louisiana’s Medicaid costs, a figure that will
plunge nearly 18 percentage points come Jan. 1, 2011. That would cost Louisiana, according to [Alan] Levine [Louisiana secretary of health and
hospitals], some $900 million a year for the ensuing three years.
It would, he has warned, wreck the state’s budget.

The Obama administration has
insisted that only legislation can fix the formula, and on pages 432 to 436 of
the Senate health care bill is Landrieu’s answer.

Section 2006 is entitled, “Special
Adjustment to FMAP Determination For Certain States Recovering From a Major
Disaster.” Louisiana is the only state that qualifies.
Landrieu’s remedy would halve any decrease in Louisiana’s FMAP percentage for 2011 from the
72.47 percent in place before the stimulus was enacted. In other words, if the
bill as written becomes law, Louisiana’s FMAP percentage in 2011 would be
68.04 percent instead of dropping to 63.6. [The
Times-Picayune, 11/20/09]

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