Medicaid implements new payment model for Louisiana hospitals

BATON ROUGE, La. (BRPROUD) – According to a Thursday (August 25) news release from the Louisiana Department of Health (LDH), the state’s Medicaid program has changed the way the state compensates hospitals that provide Medicaid patients with care.

The Centers for Medicare & Medicaid Services (CMS) gave Louisiana Medicaid the greenlight to begin utilizing a new process called a ‘state directed payment model.’

This model is designed to increase hospital supplemental payments and ensure that safety-net hospitals across Louisiana continue to receive adequate financial support without requiring additional state general funds.

LDH adds that the new model also creates more uniform guidelines and stability for hospital payments.

Throughout the 2022 Legislative Session, LDH worked alongside Governor John Bel Edwards and a number of other state officials to garner support for the implementation of new model.

In this regard, State Rep. Clay Schexnayder said, “This was important to legislators which is why we passed House Concurrent Resolution 8 of the 2022 Legislative Session. We are grateful for the thoughtful and transparent process LDH used in the development of this new hospital payment model, which focuses on effectively and appropriately funding our vital network of hospitals.”

According to LDH, the increased payments will be based on Medicaid inpatient and outpatient hospital, long-term care, free-standing rehabilitation and free-standing psychiatric hospital services across the state.

The new payment model became effective July 1 of this year.