HHS Announces Additional $195 Million in Grants for Gulf Coast Region

To provide direct patient care and attract good health care workers, HHS Secretary Mike Leavitt recently announced that $195 million in additional grant funds have been made available to improve health care in areas affected by Hurricane Katrina.

Of the $195 million in grants, $100 million will be allocated to Louisiana for public and not-for-profit clinics that provide primary care to low-income and uninsured residents in the Greater New Orleans area. An additional $60 million will go to the states of Alabama, Louisiana and Mississippi to be directed to acute care hospitals, skilled nursing facilities, inpatient psychiatric facilities and community mental health centers. The remaining $35 million will go to Louisiana for further assisting the Greater New Orleans area in recruiting and retaining health care workers.

“The three states hit hardest by Katrina – Alabama, Louisiana and Mississippi – continue to face challenges in attracting health care workers and providing patient care. These grants will help alleviate the financial pressures faced by providers and allow the people of the Gulf Coast region broader access to care,” Leavitt said. “This is emergency funding and these grants should be viewed as a bridge to a long-term solution. We continue to believe that Louisiana’s best interests will be served if it submits a large-scale waiver request. For now, these grants address immediate needs.”

Louisiana’s $100 million grant will be used by clinics to restore and expand access to outpatient primary care, including professionally delivered medical and mental health services, substance abuse treatment, oral health care, and optometric health care administered in a clinical setting. Of these monies, $4 million will be used to restore capability to the city of New Orleans Health Department to provide primary care in city neighborhoods that are not adequately served. Because of the unique impact on the low-income and uninsured populations of Greater New Orleans caused by the storm and its resulting floods, the Secretary is directing the resources to Jefferson, Orleans, St. Bernard and Plaquemines Parishes.

The additional $60 million that will be divided among Alabama, Louisiana and Mississippi will be used to help certain providers that face financial pressures as a result of changing wage rates that have not yet been reflected or adjusted for in Medicare payment methodologies. Based on each eligible organization’s share of total Medicare payments under a prospective payment system for inpatient care, the Centers for Medicare & Medicaid Services (CMS) will allocate funds in the following proportions and amounts: 44%, just over $26 million, for Louisiana; 39% or approximately $23 million for Mississippi; and 17% or $10.5 million for Alabama. Funding is available to care providers in counties/parishes designated by the Federal Emergency Management Agency to receive both individual and public assistance. As part of the grant process, the three states must submit applications to CMS.

In addition, the Secretary has made $35 million available for a supplemental grant for Louisiana to use for the Greater New Orleans area to help the region recruit physicians, dentists, psychiatrists, registered nurses, clinical faculty, and licensed professional health care staff. Louisiana has flexibility in determining the type and scope of recruitment activities, but these efforts can include income guarantees, annual medical malpractice payment relief, loan repayments and incentive payments, such as relocation expenses and sign-on bonuses.

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