Analysis: Clash Over Medicaid Deals May Influence Tax Debate

BATON ROUGE, La. (AP) — Want a preview of how things might be shaping up in Louisiana's latest round of budget and tax negotiations as the $1 billion budget gap nears? The clash between Democratic Gov. John Bel Edwards and a group of House Republicans over multibillion-dollar Medicaid contracts reinforces expectations the road to a possible budget deal will be a rocky one.

The two sides seem unable — or unwilling — to see eye-to-eye on matters of state finances, an indication that compromise likely will be difficult to reach on another round of haggling over taxes to balance the state budget in the spring.

The latest financial feud centers on $15.4 billion in Medicaid contract extensions sought by the governor to continue having five private companies manage the care of 90 percent of Louisiana's Medicaid patients, about 1.5 million people, half of them children.

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Republicans on the Legislature's joint budget committee stalled a vote on the 23-month extensions in October, and a majority of House GOP lawmakers voted down the contracts twice this month. They've raised concerns about the cost of the deals, the process for developing them and oversight of the spending.

Edwards called the lawmakers obstructionists causing a "partisan spectacle" and "leveraging the health and well-being of Louisiana citizens for messy political battles."

House Speaker Taylor Barras, who has voted against approving the contracts, hasn't returned phone calls from The Associated Press to discuss them. The leader of the opposition effort, House Appropriations Chairman Cameron Henry, said lawmakers were trying to get the best deals for taxpayers.

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"A contract of this massive magnitude should have been reviewed multiple times," the Jefferson Parish Republican said. "The value is one-fourth of the state budget."

The current managed-care contracts, negotiated by former Gov. Bobby Jindal's administration, expire Jan. 31.

Rather than try another vote in December, the Edwards administration decided to sidestep lawmakers, using a state law for emergencies to start the process for enacting the Medicaid contracts without legislative approval.

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Once again, as in so many other debates, Edwards and House Republican leaders seemed incapable of finding middle ground.

That provokes questions about whether the two sides can settle on an approach to close the more than $1 billion budget shortfall looming in the financial year that begins July 1. House Republican leaders blocked tax bills previously sought by Edwards to fill the gap, and Edwards rejected their approach to slashing spending.

Consensus seems far away.

In the more immediate disagreement, Edwards intends to enter into the 23-month deals with the managed-care companies relying on a statute that allows for emergency contracting when an imminent threat to public health, welfare or safety exists.

"If you're a Medicaid recipient and you're shortly going to be denied a service because there was no program in place to provide a doctor to you, that would sound like an emergency to me," Edwards' chief lawyer Matthew Block said.

Henry insists there's enough time to tweak the contracts to address House Republicans' concerns and get them approved in December. Block disagreed, citing the complexity of the contracting process — and saying he's never been assured a deal could be reached by December.

Henry said the governor was trying to circumvent legislative oversight by enacting the contracts on his own. He questioned the precedent that was being set. And he said Edwards, a former state House member, would have railed against such a maneuver as a lawmaker.

"If he was a state representative and Bobby Jindal had done this, he would have been screaming from the top of the Capitol, for any contract, let alone a contract of this size," Henry said.

Block rejected assertions the emergency plan locked lawmakers out of the process.

"We appeared before them on three separate occasions asking for their input, asking for their approval," he said. "That's a strange argument to me when anybody who's been paying attention to this has been able to see how hard the (health) department has worked to get information to the legislators, to answer questions."

But the Edwards administration never offered to make changes to the deals before the joint budget committee, instead making slight adjustments only when moving ahead with the emergency contracts.

By Melinda Deslatte, Associated Press

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