Louisiana may have received an extra $300 million in Medicaid funding in the just-passed health care reform legislation, but it will have to first repay $122 million to the federal government for misspending Medicaid funds.

The state violated federal Medicaid rules in making reimbursement to government-run nursing homes in 2001 and 2002.  Louisiana officials settled the issue by agreeing to a penalty of $116 million and another $6 million in interest.

Aside from this settlement, Louisiana is facing at least two additional Medicaid disputes with the federal government.  The state has tentatively agreed to repay funds that were used to pay claims against the state is its self-insurance program, with a potentially larger claim pending against the state for overpaying state-run charity care hospitals during the 1990’s.. 

The Medicaid fund disputes come at a time when the state is considering major changes in its delivery of care to the poor and uninsured.  Louisiana officials are planning to close one public hospital in Baton Rouge, and contracting with a private concern to serve patients, while also moving more services over to private providers.