By:Julie O'Donoghue-Oct. 8, 2025 Louisiana Illuminator
Louisiana has increased the amount of money the state will pay to physicians and other health care providers treating Medicaid patients in an effort to expand health care access for low-income people.
Medicaid enrollees often struggle to find doctors willing to treat them because the government health care program pays low reimbursement rates for services. The Louisiana Department of Health announced Tuesday it has raised rates in order to incentivize more medical professionals to see people with Medicaid coverage.
“Today’s move really creates a space to allow physicians all over the state to be able to take more Medicaid patients,” Louisiana health secretary Bruce Greenstein said at a news conference at the State Capitol.
About 1.6 million Louisiana residents, a third of the state’s population, receive health insurance through the Medicaid program. It provides government-backed coverage to low-income families, pregnant people, seniors in nursing homes and residents with disabilities.
For years, doctors have complained the rates to treat Louisiana’s Medicaid enrollees are so meager that they don’t cover the costs of providing care in some cases. The low reimbursement contributed to a shortage of specialists, such as obstetricians who deliver babies, willing to treat Medicaid patients or practice in rural parts of the state, where Medicaid use rates are higher.
Surgeon General Ralph Abraham, a primary care physician who works part-time at a health clinic in rural Northeast Louisiana, said he believes the higher Medicaid payments will help bring down the state’s high rates of chronic illnesses. People with Medicaid should be able find doctors sooner and prevent certain diseases from taking root, he said.
“I can’t stress how big a deal this really is,” Abraham said.
The change won’t be cheap, however. The higher rates are estimated to increase the state’s Medicaid budget by $258.4 million in the current budget year that ends June 30, 2026. This includes $200.5 million in federal funding and approximately $58 million from the state.
The health department will cover $22.3 million of the state’s portion of the bill with savings achieved by removing people from the Medicaid program who were deceased or not supposed to be enrolled, said Drew Maranto, the agency’s undersecretary who oversees the Medicaid program.
The new rates will bring Medicaid rates for various types of health care professionals – including doctors, nurse practitioners and physician assistants – up to at least 85% of the rates paid by Medicare, another government health insurance program that covers people 65 and older.
Prior to this month, Louisiana Medicaid rates were approximately 73% of the corresponding Medicare rate, though the exact amount varied across the types of provider. For example, Medicaid rates for adult primary care visits are going up 31% under the new system, but the rate for anesthesiologists will only increase 24% because those services were already closer to the Medicare rate.
The rate increases will be given out retroactively for medical visits made since June 30.
Dr. Wyche Coleman Jr., a primary care physician practicing in Coushatta, said he believes the higher rates will make it easier for him to find medical specialists to see his patients. Coleman said approximately 50% of his patients are enrolled in Medicaid.
“I think that having these specialty physicians more available for our patients is going to improve the health care outcomes of Louisiana more than anything else I’ve seen happen in the last three or four decades,” Coleman said at the news conference.
His son, Wyche Coleman III, is an ophthalmologist and the state’s deputy surgeon general.
Gov. Jeff Landry and state lawmakers indicated through a 2024 law they are interested in increasing Medicaid rates even further. By 2027-28, Louisiana’s Medicaid rates are supposed to equal to Medicare rates.
But any future increases will require state lawmakers to allocate more state funding to the Medicaid program and the federal government to agree to pay for the rate increases.