The state health agency issued emergency rules Friday that immediately implemented reimbursement rate reductions for hospitals and other Medicaid health-care providers.

The 7 percent cuts are part of some $445 million in reductions  the state Department of Health and Hospitals proposed to balance its budget for the fiscal year beginning July 1.

Reimbursements are the pay hospitals, clinics and other providers receive for delivering care for the poor under the government insurance program called Medicaid.

DHH’s emergency imposed the cuts, which have not yet been approved by the state Legislature. Lawmakers recently began deliberations on Gov. Bobby Jindal’s proposed $26.7 billion budget, which includes the DHH cuts.

The move immediately triggered an outcry from Louisiana Hospital Association president John Matessino.

“I am extremely disappointed in the administration’s decision to further reduce hospital reimbursement, which continues to weaken our hospitals’ ability to serve their communities,” said Matessino.

“We would like to know why,” challenged Matessino. “We are surprised and shocked.”

Charles Castille, DHH undersecretary, said the health agency is proceeding with the rate reductions now to achieve the maximum savings included in House Bill 1 — the budget bill.

“If we started rules after the legislative session, it would take several months to put these rules in place and we would only be able to get eight months of cuts,” said Castille.

The rate reduction would affect payments made to providers after July 1, Castille said. However, it would affect services rendered in May and June for which hospitals and other providers are seeking reimbursement.

If the Legislature does not go along with the budget cuts or modifies them, Castille said DHH would “simply pull back and redo on whatever rules are cut or adjusted.”

The emergency rules impact payments for inpatient and out-patient hospital services, emergency and nonemergency medical transportation, kidney dialysis treatment, home- and community-based services, the adult denture program, durable medical equipment, anesthesia and case management.

Matessino said the cuts come on top of those issued in February and those proposed in the governor’s budget. “These cuts are devastating,” said Matessino.

In the Baton Rouge area alone, the cumulative cuts hit $32.9 million and are projected to lead to 647 lost jobs, according to a hospital association study.