DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part of the
legislative instrument. The keyword, one-liner, abstract, and digest do not constitute part of the law
or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
HB 374 Original 2019 Regular Session Thomas
Abstract: Provides for implementation of a specific hospital payment methodology in the Medicaid
hospital program.
Proposed law requires the secretary of the La. Department of Health (LDH) to ensure that the
hospital reimbursement system of the Medicaid program of this state adheres to all of the following
principles:
(1)Hospital payments are made according to a "money follows the person" model which
minimizes or eliminates disparities in reimbursement to different hospitals for the same
service provided to the same Medicaid patient.
(2)Hospital payments are value-based and tied to clinical outcomes.
(3)Medicaid reimbursement adequately funds the cost of care that a hospital provides to a
Medicaid patient.
(4)Medicaid payments are equitable across the various hospitals of this state.
(5)The reimbursement system promotes access to care for Medicaid beneficiaries.
Proposed law requires that the Medicaid hospital reimbursement system, to the maximum extent
practicable, rely upon base-rate payments in order to minimize the exposure of this state to risks
associated with utilization of supplemental payments.
Proposed law requires that on or before Jan. 1, 2020, the secretary of LDH shall design and
implement a payment methodology for hospital inpatient services provided to Medicaid beneficiaries
based upon diagnosis-related groups in accordance with the provisions of proposed law. Provides
that the payment methodology shall account, at minimum, for all of the following:
(1)Hospital peer groups.
(2)Hospitals with high Medicaid volume.
(3)Capital costs.
(4)Applicable provisions of present law known as the Rural Hospital Preservation Act. (5)Psychiatric hospitals.
(6)Rehabilitation hospitals.
(7)Outlier payments.
(8)Patient transfers.
Proposed law requires that on or before April 1, 2020, and on a semiannual basis thereafter, LDH
shall submit a report to the legislative auditor concerning the implementation of the hospital payment
methodology provided for in proposed law and provides for the content of the report. Requires that
LDH submit each such report to the House Committee on Appropriations, the Senate Committee on
Finance, and the House and Senate committees on health and welfare no fewer than 30 days after
transmitting the report to the legislative auditor.
Proposed law requires that LDH promulgate in rule the hospital payment methodology provided for
in proposed law.
(Adds R.S. 40:1248.1-1248.5)