Louisiana health officials seek 12-month extension for Medicaid managed-care contracts as they redesign quality and oversight

The Louisiana Department of Health asked the Joint Legislative Committee on the Budget on Oct. 16 for a 12‑month extension of its existing contracts with six Medicaid managed‑care organizations to preserve continuity of coverage while the agency redesigns quality measures and oversight.

Drew Maranto, undersecretary for Medicaid at the Louisiana Department of Health, told the committee that the extension would “maintain stability for approximately 1,400,000 Medicaid enrollees” and give the department time to “strengthen contract design, improve oversight and incorporate lessons learned.” He said the extension would use a portion of a 24‑month renewal option already in the current contracts and would begin in January.

Why it matters: Legislators pressed agency officials for specifics about what would change during the extension, how the department will hold managed‑care organizations (MCOs) accountable, and what budgetary effects the amendments will have. Committee members repeatedly asked for more detail before taking a final vote.

Planned contract changes and department priorities - Redesign of quality measures and withhold: Maranto said Attachment H (the set of quality measures and withholds) will be completely redesigned. The department plans to increase the quality withhold from 2% to 3% and to reorient incentives to emphasize outcomes such as cancer screening rates, behavioral‑health parity, and reductions in avoidable emergency‑room use. - Case management and member engagement: The department will change requirements so MCOs can “meet the member where they are” using text, email, telehealth or in‑person contact, and will scale back lengthy initial assessments that deter member engagement. - Non‑emergency medical transportation (NEMT): Kim Sullivan, senior advisor to the secretary for Medicaid, described new penalties tied to NEMT performance: “we are changing it to, I think it’s if they have 2% [no‑shows], we’re increasing the penalty, up to $10,000 and if they can’t fix it within subsequent months, it goes up to $25,000.” Sullivan said the change is aimed at reducing missed trips and improving accountability. - Provider relations and the “gold card” pilot: The department will allow an MCO “gold card” program that exempts high‑performing providers from some prior‑authorization requirements to reduce administrative burden. - Open enrollment and network rules: The department plans to eliminate the traditional annual open‑enrollment window and instead permit members to switch plans twice per calendar year without cause; other contract language around provider termination, credentialing timelines and network adequacy will be adjusted.

Budget and directed payments Legislative lawmakers pressed the department on the contract dollar caps and the interaction of directed (supplemental) payments with contract maximums. Maranto and departmental staff said the contract maximums must be raised to allow expected supplemental hospital and physician payments to flow through MCOs to providers; staff said most of the aggregate increase in managed‑care contract ceilings is attributable to expanded directed payment programs rather than base per‑member per‑month (PMPM) rate changes. The department said the first six months of any change are already anticipated in FY26 budget action, but longer‑term financing would be addressed in the regular budget process.

Legislators’ requests and outstanding items Multiple legislators asked for additional documentation before a final vote. Senator Sharon Barrow (Senator Barrow) specifically asked for the medical‑advisory committee report and more detail on prior compliance findings, saying: “I want you to tell me why I cannot find this medical advisory committee report.” Several members emphasized a need for clearer compliance data showing past MCO noncompliance, monetary penalties assessed and how the department plans to use the enhanced oversight to enforce contractual obligations.

No final committee vote on the MCO extension was recorded in the meeting transcript. Committee members requested more detailed breakdowns (for example, plan‑by‑plan comparisons of contract maximums and percentage changes) and asked that the secretary or a principal LDH official attend future hearings to discuss the amendments and enforcement strategy.

Context and next steps Maranto said the extension is intended to be “not business as usual” and to provide time for a “thoughtful redesign” of the managed‑care program. The department said it will publish the revised measures and amendments and meet again with legislative staff and members to answer outstanding questions. Legislators indicated they expect specific compliance data, a clearer mapping between new quality measures and dollars withheld, and a plan to address persistent NEMT and provider network problems.

Ending: The committee deferred final action on the MCO contract renewals pending the requested additional information and a follow‑up appearance by LDH officials.