Louisiana lawmakers signed off final week on one-year extensions to the state’s six greatest authorities contracts, collectively price greater than $17 billion. The agreements are with the six well being care firms that handle medical insurance for Louisiana Medicaid recipients.

“These are the biggest contracts that the state of Louisiana has in historical past,” state well being secretary Bruce Greenstein instructed Louisiana’s Joint Legislative Committee on the Finances Thursday. “They’re [the largest] yearly as a result of they solely go up.”

The managed care organizations receiving the contracts are Aetna Higher Well being of Louisiana, AmeriHealth Caritas Louisiana, Wholesome Blue, Humana Wholesome Horizons in Louisiana, Louisiana Healthcare Connections and UnitedHealthcare Group Plan.

Medicaid supplies government-backed medical insurance for low-income residents, together with kids, and people who find themselves disabled, blind and pregnant. Louisiana has a bit of over 1.5 million Medicaid enrollees, together with 479,000 folks insured by way of Medicaid growth, in keeping with well being division projections from October.

General, Louisiana’s Medicaid price range is roughly $22 billion within the present fiscal 12 months, together with$16.6 billion offered by the federal authorities. The remainder of funding comes from a combination of charges, devoted taxes that medical suppliers pay and state tax income collected from different residents and companies.

The brand new Medicaid contracts take impact in January and are price roughly $2.2 billion greater than the businesses acquired final 12 months.  The typical quantity the state pays the managed care organizations to insure Medicaid members will go up from $514 to $563 per affected person per thirty days.

A lot of that enhance might be attributed to Louisiana’s determination to pay more cash to hospitals, docs, nurse practitioners and different well being care suppliers who deal with Medicaid sufferers, in keeping with Greenstein and different members of his workers.

Louisiana considerably boosted the amount of cash Medicaid pays to hospitals and medical professionals with the intention to broaden the community of suppliers who take Medicaid sufferers. A number of docs and hospitals had been refusing to see folks with Medicaid protection as a result of they thought-about Medicaid reimbursement charges too low to cowl their prices.

Though funds to the Medicaid well being care organizations are going up considerably, Greenstein mentioned the expansion within the Louisiana program’s spending per affected person is decrease than nationwide well being care inflation.

Legislators expressed frustration final week that the six firms providing Medicaid plans have fallen wanting ample companies up to now. For instance, they hear complaints from constituents concerning the plans itemizing docs and medical amenities as being accessible to Medicaid enrollees once they aren’t taking new Medicaid sufferers.

There’s additionally an ongoing frustration with non-emergency medical transportation companies, which assist get Medicaid enrollees who can’t drive or take public transportation to and from their appointments. Legislators mentioned constituents counting on this transportation, together with these with disabilities, miss essential remedies and docs’ visits as a result of their rides by no means decide them up.

Sen. Thomas Pressly, R-Shreveport, questioned whether or not there have been sufficient incentives to enhance non-emergency medical transportation within the new Medicaid contracts.

Greenstein responded that the well being division was establishing a gaggle to review the transportation concern, and that different states have related challenges to those seen in Louisiana.

“Nobody has a system that’s superior to ours” on the subject of non-emergency medical transportation, Greenstein mentioned.

Extra usually, the state well being secretary mentioned Gov. Jeff Landry’s administration intends to lift requirements for the personal medical insurance firms receiving the enormous Medicaid contracts. They may not be rewarded with “participation trophies” for finishing up their companies, Greenstein mentioned.

“This can be a onerous reset on our aspect,” he mentioned.

The state well being division is withholding 3% of the cash paid out on a per affected person foundation to the Medicaid contract holders till the top of the 12 months when it may be decided whether or not they offered ample companies. Final 12 months, the company withheld much less, solely 2%, till the same end-of-year assessment was performed, in keeping with a reality sheet the well being division offered.

The Landry administration initially confirmed curiosity in lowering the variety of medical insurance firms with Medicaid plans from the present six when the governor took workplace in 2024. Lawmakers in each events have questioned whether or not the state is paying an excessive amount of for overhead and administrative prices with so many firms concerned.

However Greenstein, a Landry appointee, didn’t appear enthusiastic when lawmakers requested about these efforts final week. The six firms meet totally different folks’s well being care wants, and only a few Medicaid enrollees change their plan from 12 months to 12 months, he mentioned, indicating they like to remain the place they’re.

Decreasing the variety of contracts might additionally show tough due to the political stress that might ensue from nationwide well being care firms shedding out on the enterprise, though Greenstein didn’t point out that as a motive to keep away from doing so.

Nonetheless, a legislative decision Senate President Professional Tempore Regina Barrow, D-Baton Rouge, sponsored earlier this 12 months requires the state well being division to submit a report in January outlining the division’s plans for addressing oversight of Medicaid managed care organizations and what number of firms at present have contracts.

“It’s not a secret that I feel now we have too many,” Barrow mentioned final week.