Woman's Hospital Files Federal Lawsuit Alleging Inadequate Medicaid Reimbursements From Louisiana Health Department

Main Category: Litigation / Medical Malpractice
Also Included In: Medicare / Medicaid / SCHIP;  Public Health;  Women's Health / Gynecology
Article Date: 05 Oct 2007 - 8:00 PST

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Woman's Hospital in Baton Rouge, Louisiana, on Tuesday filed a lawsuit in a federal court against the Louisiana Department of Health and Hospitals and the administration of Governor Kathleen Blanco (D) for allegedly declining to adequately pay for services covered under Medicaid, the Baton Rouge Advocate reports. According to the hospital, it delivers 650 to 700 infants monthly. About 49% of the births are covered by Medicaid.

The lawsuit says that the state repeatedly has underfunded Medicaid, costing Woman's Hospital millions of dollars annually to treat women and infants enrolled in the program. According to financial records, the hospital's cost of treating Medicaid beneficiaries exceeded the amount reimbursed by the state by $12.6 million in 2005, $18 million in 2006 and could reach $21 million this year. Woman's in August announced it was cutting some services and staff, as well as eliminating the Woman's Health Research Institute, because of inadequate Medicaid reimbursements. The lawsuit also says the financial losses have become so large that plans for a new $300 million campus for the hospital could be in jeopardy.

Teri Fontenot, Woman's president and CEO, said the hospital was forced to file the lawsuit to secure the full reimbursements required by federal and state law. The lawsuit says that Woman's efforts to work with the state to increase its Medicaid reimbursements were unsuccessful despite at least 30 meetings with more than 22 members of the state Legislature and Blanco's administration. The hospital is not seeking damages but is asking the federal court to require the state to address "grossly inadequate" Medicaid reimbursements to Woman's. According to Fontenot, doing so could result in about $4 million for the hospital. "The refusal of the Department of Health and Hospitals and the governor to adequately fund the care for which the state is responsible has reached such proportions as to threaten access to many services that we provide to the community at large," Fontenot said in a statement.

State Government Reaction
Robert Johannessen, a spokesperson for DHH, said the Blanco administration and the department have worked to increase reimbursements to hospitals in Louisiana, including Woman's. It is "disappointing to learn that not only is Woman's Hospital filing suit against the department in an effort to seek a rate increase, but that they have chosen to characterize the department's efforts as 'attempting to work (with DHH) but to no avail,'" Johannessen said, adding, "Clearly, this is not the truth."

Johannessen noted that DHH increased payments to Woman's by $4.5 million this fiscal year from for treatment of the uninsured, treating a high number of Medicaid beneficiaries and for home health care. He also said the agency increased the rates paid to Woman's for the care it provides to infants with special medical needs. Marie Centanni, Blanco's press secretary, said she could not discuss pending litigation (Griggs, Baton Rouge Advocate, 10/3).

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