BATON ROUGE--A proposal to expand Louisiana’s Medicaid coverage for mental health to include partial hospitalization services is moving forward in the Legislature, but only after lawmakers removed a key component to cut costs.
Senate Bill 96, authored by Sen. Patrick McMath, R-Covington, would require the Louisiana Department of Health to reimburse providers for partial hospitalization services–an outpatient level of psychiatric care–for adult and geriatric patients treated at licensed inpatient psychiatric hospitals.
An amendment by the House Health and Welfare Committee had earlier added more-intensive outpatient program services to the bill. That change raised the projected cost to $13.3 million in the first year.
So on Sunday, the House Appropriations Committee amended that bill and removed that change to lower the cost.
As it now stands, McMath said, the bill still addresses a longstanding gap in Medicaid coverage and could reduce the state’s health care costs by limiting unnecessary emergency room visits and inpatient stays.
Rep. Denise Marcelle, D- Baton Rouge, shared that her daughter, a psychiatric nurse practitioner, has struggled to refer Medicaid patients to clinics because so few providers accept them due to low reimbursement rates.
Nic Walts, a lobbyist for the Picard Group speaking on behalf of Oceans Healthcare and Acadia Healthcare, said the bill would not raise provider rates but simply add partial hospitalization services to the Medicaid fee schedule, where no reimbursement currently exists.
The goal is to help patients continue treatment in their communities after discharge, reducing hospital readmissions.
A pilot program in Louisiana showed promising results--an 84% drop in inpatient admissions, a 58% reduction in ER visits and $700,000 in savings over six months.
The changes come at a time when state officials are worried about cuts in federal spending on Medicaid programs proposed by the Trump administration and congressional leaders. The cuts could force Louisiana and other states to add substantially to their share of the cost or cut Medicaid services.
Lawmakers have signaled interest in revisiting the idea of adding more intensive coverage in the future.
Rep. Stephanie Berault, R-Slidell, who offered the amendment to remove that coverage from the bill, called the original $13.3 million fiscal note “a bit unattainable.”
She said the goal was to scale back the proposal for now and then expand once the Legislature has data to assess the effectiveness of the partial hospitalization program.
Rep. Jerome Zeringue, R-Houma, asked whether similar programs have succeeded elsewhere. McMath confirmed that other states have adopted comparable policies and seen cost savings, though he did not name specific examples.
An additional amendment added by the House Appropriations Committee gives lawmakers more oversight of the program’s implementation.
It allows the Louisiana Department of Health to fund the program using its existing budget, but only if the department formally notifies the Joint Legislative Committee on the Budget.
The new reimbursement structure is also contingent on approval from the federal Centers for Medicare and Medicaid Services. If approved, it would take effect July 1, 2025.
