Louisiana health officials seek 12-month extension for Medicaid managed-care contracts as lawmakers press for fixes

BATON ROUGE — The Louisiana Department of Health asked the Joint Legislative Committee on the Budget on Oct. 16 to extend its existing contracts with six Medicaid managed care organizations for 12 months while the agency redesigns quality measures, strengthens oversight and seeks better outcomes for about 1.4 million enrollees.

Undersecretary Drew Maranto told the committee: "The Department of Health is requesting approval to extend our existing contracts with the 6, Louisiana managed care organizations for an additional 12 months that would start in January." He said the extension would "ensure continuous coverage for approximately 1,400,000 Medicaid enrollees across Louisiana."

The request set off extensive questioning from senators and representatives about access to care, nonemergency medical transportation (NEMT), provider payments and how supplemental and directed payment programs affect the state budget. Lawmakers repeatedly pressed the department for more detail about enforcement, contract language changes and the magnitude and source of new dollars that will flow through the MCOs.

Why it matters: The requested extension uses part of an existing 24-month renewal option in current contracts and would postpone a full rebid while LDH finalizes major edits to incentives and oversight. Lawmakers said they need detail on the department's enforcement plan and on how money designated for supplemental payments and provider-directed payments will be funded and tracked.

Key details

- Scope and timing: Maranto said the extension would begin Jan. 1 and run 12 months. He described a planned Amendment 13 that will redesign the quality-withhold and performance measures (Attachment H) on a calendar-year basis.

- Quality redesign and withhold: Maranto and other LDH officials said they are increasing the contractual withhold from 2% to 3% and redesigning roughly 20 new quality measures aimed at cancer screenings, behavioral health parity, emergency department utilization and chronic disease management.

- Transportation (NEMT): "When we've been doing the quality work, probably one of the number one things that I've heard is continued issues with transportation," Maranto said. Kim Sullivan, senior adviser to the secretary for Medicaid, said LDH is "changing some of the penalties around NEMT. We are changing it to, I think it's if they have 2% no shows, we're increasing the penalty, up to $10,000 and if they can't fix it within subsequent months, it goes up to $25,000 for the no-show issue that's been occurring." Sullivan described the change as a penalty on the MCO for persistent no-shows.

- Case management changes: LDH said it will relax face-to-face requirements and allow member contact by telephone, text, e-mail and video to increase uptake of case management and scale back lengthy initial assessment interviews.

- Provider burden and credentialing: LDH said it will implement a "gold card" program that allows high-performing providers to bypass prior authorization for certain services as a way to reduce administrative burden.

- Supplemental and directed payments: LDH told the committee the majority of the apparent increase in contract maxima reflects directed payment programs that flow through MCOs to providers. Officials attributed roughly $600 million in additional physician directed payments and about $1.5 billion in additional hospital directed payments as drivers of the larger contract thresholds; LDH said those payments are funded largely by intergovernmental transfers and federal matching dollars rather than increased state general fund.

Lawmakers' concerns

Committee members repeatedly sought more concrete information on enforcement and outcomes. Senator Boudreau asked for clearer reports of prior noncompliance findings and sanctions. Senator Barrow and others said LDH should produce the external compliance and medical-advisory reports that detail problem areas and past corrective actions. Several members urged LDH to increase transparency on how many and which MCOs were cited for provider-network, nonemergency transportation (NEMT) failures and what monetary penalties resulted.

Budget and long-term risk

Questions centered on whether federal changes or the scheduled phase-down of certain provider assessments could reduce the federal match that funds directed payments in future years. Maranto said federal changes would not affect the two years in question for the extension but acknowledged provider tax levels and related federal approvals will influence financing in later years.

What the committee recorded

LDH presented the extension request and proposed contract amendments and answered more than two hours of questions. The transcript does not show a formal recorded committee vote to approve the extension during this hearing. Members requested additional, written materials and follow-up briefings on quality measures, supplemental payments, NEMT performance data and the medical-advisory findings. LDH officials agreed to provide additional breakdowns and meet with members.

Ending

The department said the one-year extension is intended to maintain continuity while LDH completes a redesign of contract incentives and oversight. Committee members asked for specific deliverables and reports before giving final approval; LDH committed to supplying more detailed analyses and to continuing one-on-one meetings with legislators.