Louisiana Hospital Stabilization Fund, Amendment 2 (2014)

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Amendment 2
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OriginLouisiana State Legislature
TopicHealthcare
StatusApproved Approveda
2014 measures
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November 4
Amendment 1 Approveda
Amendment 2 Approveda
Amendment 3 Defeatedd
Amendment 4 Defeatedd
Amendment 5 Defeatedd
Amendment 6 Approveda
Amendment 7 Approveda
Amendment 8 Approveda
Amendment 9 Defeatedd
Amendment 10 Approveda
Amendment 11 Defeatedd
Amendment 12 Defeatedd
Amendment 13 Defeatedd
Amendment 14 Defeatedd
Endorsements


The Louisiana Hospital Stabilization Fund, Amendment 2 was on the November 4, 2014 ballot in Louisiana as a legislatively referred constitutional amendment, where it was approved. The measure created a “Hospital Stabilization Fund” into which hospitals can deposit money in order to draw down more federal Medicaid matching funds. The legislature is tasked with determining the assessment fee on eligible hospitals. The fund was designed so that hospitals will receive more money back than they would put into the fund due to the flow of federal dollars.[1][2]

The measure was sponsored in the Louisiana Legislature by State Representative Charles Kleckley (R-36) as House Bill 532.[1]

Election results

Louisiana Amendment 2
ResultVotesPercentage
Approveda Yes 771,253 56.22%
No600,70543.78%

Election results via: Louisiana Secretary of State

Text of measure

Ballot summary

The official ballot text read as follows:[1]

“ Do you support an amendment to create the Hospital Stabilization Fund to stabilize and protect Medicaid reimbursements for health care services by depositing assessments paid by hospitals, as authorized by the legislature, into a fund to support Louisiana hospital reimbursement?

(Adds Article VII, Section 10.14)[3]

”

Constitutional changes

The amendment added a Section 10.13 to Article VII of the Louisiana Constitution.[1]

Note: Use your mouse to scroll over the text below to see the full text.

§10.13. Hospital stabilization formula and assessment; Hospital Stabilization Fund

(A) Hospital Stabilization Formula.

(1) The legislature may annually adopt a Hospital Stabilization Formula, hereafter referred to in this Section as “the formula", by concurrent resolution by a favorable vote of a majority of the elected members of each house. Such resolution shall be referred to the standing committees of the legislature that hear the general appropriation bill. The formula shall, to the maximum extent possible, enhance the economic viability of Louisiana hospitals and reduce shifting the cost of caring for Louisiana's needy residents to the state's insured residents.
(2)
(a) The first formula established pursuant to Subparagraph (1) of this Paragraph, which shall require a favorable vote of two-thirds of the elected members of each house for adoption, shall define and establish as the base reimbursement level under the Louisiana medical assistance program provided for in Title XIX of the Social Security Act, hereafter referred to as the "Medicaid Program", to hospitals for inpatient and outpatient services in Fiscal Year 2012-2013. The formula shall also provide for the preservation and protection of rural hospitals as provided for by law. Each formula established thereafter may apply a rate of inflation, which shall not be a negative rate, to the base reimbursement level from the previous formula adopted by the legislature.
(b) Each formula shall also include and establish assessments to be paid by hospitals and the basis on which such assessments shall be calculated, provided the amount of the assessments does not exceed the nonfederal share of the reimbursement enhancements.
(c) Each formula shall also establish reimbursement enhancements under the Medicaid Program, or its successor, achieving the maximum reimbursement by federal law and resulting in distributing such reimbursement enhancements exclusively among hospitals for hospital services. Reimbursement enhancements may also be distributed for uninsured services delivered.
(d) Each formula shall also include any additional provisions necessary to the implementation of the formula. Neither the assessments nor the reimbursement enhancements established in the formula adopted by the legislature shall be implemented until each has been approved by the federal authority which administers the Medicaid Program.
(3) The base reimbursement level resulting from the formula shall not be paid from the Hospital Stabilization Fund.
(4) No additional assessment shall be collected and any assessment shall be terminated for the remainder of the fiscal year from the date on which any of the following occur:
(a) The legislature fails to adopt a formula for the subsequent fiscal year.
(b) The Department of Health and Hospitals, or its successor or contractors, reduces or does not pay reimbursement enhancements established in the current formula as adopted by the legislature.
(c) The appropriations provided for in Subparagraph (B)(2) of this Section are reduced.
(5) The treasurer shall return any monies collected after the date of termination of an assessment to the hospital from which it was collected.

(B) Appropriation.

(1) The legislature shall annually appropriate an amount necessary to fund the base reimbursement level for hospitals established in the most

recent formula adopted by the legislature.

(2) The legislature shall annually appropriate the balance of the Hospital

Stabilization Fund solely to fund the reimbursement enhancements as provided in the most recent formula adopted by the legislature.

(3) Notwithstanding Article VII, Section 10(F) of this constitution, neither the governor nor the legislature may reduce the appropriation funding the base reimbursement level or the reimbursement enhancements to satisfy a budget deficit, except the governor may reduce the appropriation to the base reimbursement level if the following occur:
(a) Such reduction does not exceed the average reduction of those made to the appropriations and reimbursement for other providers under the Medicaid Program, or its successor; and
(b)
(i) If the legislature is in session, the reduction is consented to in writing by two-thirds of the elected members of each house in a manner provided by law; or
(ii) If the legislature is not in session, the reduction is approved by two-thirds of the members of the Joint Legislative Committee on the Budget, or its successor.

(C) Hospital Stabilization Fund.

There is hereby established as a special fund in the state treasury the Hospital Stabilization Fund, hereafter referred to as "the fund." After compliance with the requirements of Article VII, Section 9(B) of this constitution relative to the Bond Security and Redemption Fund, the treasurer shall deposit all proceeds from the assessment collected pursuant to the Hospital Stabilization Formula provided for in this Section. The monies in the fund shall be invested in the same manner as monies in the state general fund, and all interest earned on the investment of the fund shall be deposited in and credited to the fund. Appropriations from the fund shall be restricted to funding the reimbursement enhancements established in the Hospital Stabilization Formula adopted by the legislature for the fiscal year in which the assessment is collected.[3]

Background

Hospital Stabilization Funds

According to the Public Affairs Research Council, most states assess fees on hospitals that are used to "draw down" federal dollars through the Federal Medicaid Matching Rate. These Medicaid dollars are used to compensate hospitals for the care they give to Medicaid patients and the uninsured. Before the 2014 elections, only 10 states, including Louisiana, didn't have this type of hospital funding.[2]

Support

The measure was introduced into the legislation by Rep. Charles Kleckley (R-36).[1]

A full list of legislators by how they voted on the amendment can be found here.

Supporters

Officials

Amendment 2 was sponsored by the following officials in the Louisiana Legislature:[1]

Organizations

  • Louisiana Hospital Association[4]

Arguments

The Public Affairs Research Council provided arguments for and against the constitutional amendment. The following was the council's argument in support:

“ Hospitals are legally and morally bound to treat patients needing urgent care but could suffer losses treating Medicaid patients and the uninsured under the current financial system in Louisiana. After years of government cuts in provider rates, Louisiana’s community and private hospitals need a more reliable source of funding to fulfill their caretaker mission. Following a plan used in most states, the proposed amendment would allow Louisiana to take advantage of a federal Medicaid program routinely used to stabilize hospital finances nearly nationwide. The new plan would draw down federal matching dollars without ultimately costing either the state or the hospitals more money.

The new system would provide assurances to the hospitals that, if they pay the new assessments, their investment will not be raided to fill holes in the state budget unrelated to healthcare. That is why this plan needs the protections for its formula and its trust fund that only the state constitution can provide. By establishing a more sustainable source of financing, hospitals can better avoid cost shifting their expenses to patients and insurance companies and thereby save money for citizens and business. Hospitals also would have more reliable revenues to invest in technology, wellness programs, health screenings and better access to care. [3]

”
—Public Affairs Research Council[2]

Opposition

A full list of legislators by how they voted on the amendment can be found here.

Arguments

The Public Affairs Research Council provided arguments for and against the constitutional amendment. The following was the council's argument against:

“ Creating constitutional protections for a certain class of health care providers – hospitals – will create problems for other programs without this special status. In particular, higher education and health care providers without this protection will be at greater risk for reductions because of the state’s limited discretionary spending authority. Constitutional provisions limiting the budgetary options of policymakers should be avoided.

The financing system created by this amendment could be done without constitutional protection or an amendment. The same program could be created by statute, which would give the governor and Legislature more flexibility to tweak the law if necessary. [3]

”
—Public Affairs Research Council[2]

Path to the ballot

Louisiana Constitution
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Preamble
Articles
1 • 2 • 3 • 4 • 5 • 6 • 7 • 8 • 9 • 10 • 11 • 12 • 13 • 14
See also: Amending the Louisiana Constitution

On March 29, 2013, State Representative Charles Kleckley (R-36) introduced a bill to the legislature to alter the constitution and put the measure before voters. The bill was approved through a two-thirds vote in both legislative chambers. HB 532 was approved by the Louisiana House of Representatives on May 7, 2013. The amendment was approved by the Louisiana Senate on May 28, 2013.[5]

House vote

May 7, 2013 House vote

Louisiana HB 532 House Vote
ResultVotesPercentage
Approveda Yes 99 94.29%
No65.71%

Senate vote

May 28, 2013 Senate vote

Louisiana HB 532 Senate Vote
ResultVotesPercentage
Approveda Yes 33 86.84%
No513.16%

Related measures

See also

External links

Additional reading

Footnotes

  1. ↑ 1.0 1.1 1.2 1.3 1.4 1.5 Louisiana Legislature, "House Bill No. 532," accessed January 16, 2014
  2. ↑ 2.0 2.1 2.2 2.3 Public Affairs Research Council, "Guide to the 2014 Constitutional Amendments," accessed September 12, 2014
  3. ↑ 3.0 3.1 3.2 3.3 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source. Cite error: Invalid <ref> tag; name "quotedisclaimer" defined multiple times with different content Cite error: Invalid <ref> tag; name "quotedisclaimer" defined multiple times with different content Cite error: Invalid <ref> tag; name "quotedisclaimer" defined multiple times with different content
  4. ↑ Louisiana Hospital Association, "HB 532 and HB 533: Louisiana Hospital Stabilization Formula & Fund and Other Provider Protections," accessed January 16, 2014
  5. ↑ Louisiana Legislature, "Bill Info - HB 532," accessed January 16, 2014
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