Amid all the bad news about Louisiana's fiscal problems, one bit of good news has emerged: state Sen. David Heitmeier (D-Algiers) is succeeding in his efforts to leverage more federal health care dollars for Louisiana community and private hospitals, which have been hard hit since Hurricane Katrina. The latest example: $27 million in federal Upper Payment Limit (UPL) payments to Louisiana hospitals at the end of 2010, including more than $20 million for private hospitals in the New Orleans area.
Heitmeier, an optometrist, has established himself as the legislature's health care financing expert. His plan — dubbed "The Heitmeier Plan" by Gambit two years ago — is a two-tiered approach to leveraging more federal health care money for area hospitals. The plan also saves the state millions in public health care expenses.
The first tier taps into the federal UPL program by allowing private hospitals to form joint nonprofits that provide health care services to low-income citizens — services otherwise provided by the state. Many private hospitals already provide care for the poor, but those services either are uncompensated or under-compensated by the feds. Heitmeier's plan allows them to tap the federal UPL program and become fully compensated. Louisiana became the second state (after Texas) to tap into the UPL program under a bill Heitmeier introduced and passed two years ago.
The second tier taps into the federal "physician UPL" program and, when fully implemented, will provide funds for publicly owned community hospitals such as East Jefferson and West Jefferson hospitals.
Both phases of Heitmeier's plan require complex approvals at the state and federal levels, but potentially the state can realize more than $700 million a year in savings, he says. "Louisiana is eligible for $250 million a year in the general UPL program, but the state has not realized that potential because it did not have matching dollars available," Heitmeier says. "Now we're doing it by allowing the private nonprofits to perform services previously provided by the state, which frees up state general fund dollars for the match. Both the state and the hospitals benefit from this."
Heitmeier says Louisiana has the potential to tap another $25 million to $40 million under the physicians' UPL program. The latter program is still in the developmental stages for Louisiana, he says. "Potentially, the general UPL, which is $250 million this year, could provide Louisiana with $700 million a year using an additional $450 million in federal Disproportionate Share funds, which is another pool of reimbursements. And next year our share of the general UPL could be $350 million."
The state's potential to tap all that money depends on how quickly parishes and hospitals get comfortable with the concept and get on board — and how quickly the state can identify services it currently delivers, but which the nonprofits could just as easily deliver, Heitmeier says.
In the December payments, Tulane University Medical Center received $8.6 million; hospitals operated by Ochsner received just over $8 million; Touro Infirmary received $3.4 million; and Children's Hospital received $57,000.
"This is all new money, with not one penny in additional taxes," Heitmeier says. "This $27 million is the first installment. We should get another payment of close to $100 million at the end of March." — Clancy DuBos