LDH presents $23.5 billion budget; announces $208.4M/year rural health grant and describes SNAP transition and new incentives

Heather McKnight of Senate Fiscal framed the Department of Health budget, highlighting Medicaid as the principal driver and noting a $1.4 billion carryforward from FY25. The department’s executive request for fiscal 2027 was reported at about $23.5 billion, most of it federal funding tied to Medicaid.

Bruce Greenstein, LDH secretary, said the department’s priorities are improving health outcomes, moving people toward independence, and putting patients over bureaucracy. He told the committee that roughly 91% of LDH resources are dedicated to health care coverage and emphasized that state funds are being used to leverage federal match and extend services to vulnerable populations.

Greenstein described the federal rural health transformation award Louisiana won: the state expects to receive about $208.4 million a year for five years to shore up rural hospitals and providers, expand workforce training (including rotations to encourage nurses and allied health professionals to serve rural areas), invest in technology for rural providers, and support recruitment and retention through sign‑on and retention bonus reimbursements.

LDH officials also detailed reforms to hospital incentive programs and managed‑care contracts. Under revisions to MSIP and the MCO withhold, LDH said it has developed 18 incentive measures for hospitals and revised MCO contract attachments so health plans must earn back more than $300 million based on measurable performance rather than automatic distributions.

The department reviewed its October absorption of SNAP Employment & Training functions from DCFS and described the state’s emergency LSAP payments during a federal funding lapse. Greenstein said LDH launched a state‑financed weekly payment program to ensure elderly and child recipients continued to receive benefit equivalents while federal funding was paused; once federal funds resumed, the department converted recipients back and expects reimbursement for the state‑fronted payments.

Greenstein and other LDH leaders addressed staff and vacancy matters, saying roughly 1,313 employees moved into LDH in the transfer, with notable vacancy concentration in facilities and direct‑care roles. They described steps to improve eligibility 'hygiene' after the public‑health emergency—including new data matches to remove deceased or out‑of‑state records—and said LDH and the Attorney General are pursuing fraud referrals where appropriate.

Committee members also raised provider concerns about prior authorization burden under MCO contracts and asked for follow‑up on coding or system issues that might prevent timely reimbursements. LDH said it is working to reduce administrative friction and would follow up with providers and the committee.

LDH officials said several items remain pending federal approval—most notably CMS approval of certain waivers for physician‑directed payments—but described an active engagement with federal partners. The department told lawmakers it expects much of the rural transformation grant and related competitive opportunities to begin flowing to providers between summer and fall of the current year.

The committee heard no formal votes on LDH items during this session; staff committed to providing requested technical and program data.