News Release

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 today announced that additional grant funds have been made available to improve health care in areas affected by Hurricane Katrina. To date, HHS has provided the region with more than $2.5 billion in funding for social services, health care and efforts to rebuild the health care system in the Gulf Coast region. 

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,” Secretary 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.”

In addition to the $195 million announced today, other awards this year have included $175 million in Deficit Reduction Act grants.

“I am pleased that Secretary Leavitt has responded to the region’s pressing health care needs, including mental health challenges, with thoughtful, targeted, and effective federal support to local leaders and providers,” said Donald E. Powell, federal coordinator for Gulf Coast Rebuilding. “This aid will not only address the immediate needs of patients, hospitals, and neighborhood caregivers, but will also advance the vision for a redesigned health system that offers greater access to high-quality preventive care for more citizens.”

Secretary Leavitt has visited the Gulf Coast region regularly since Hurricane Katrina and most recently visited four clinics in Greater New Orleans on April 5.

“During my 13 visits to the region, I have seen health care providers doing all they can to provide people with care,” Secretary Leavitt said. “I applaud their determination and good work. It’s important that we support these neighborhood efforts in the short-term, so these organizations survive in the long-term.”

As a result of those visits and based on input from providers, state health care officials and others, HHS is making $100 million available to Louisiana to assist not-for-profit clinics and public health entities that treat the area’s neediest residents.  The grants 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.

An additional $60 million will be divided among the three states 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 percent, just over $26 million, for Louisiana; 39 percent, approximately $23 million for Mississippi; and 17 percent, $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.

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Last revised: January 20, 2009