FERRIDAY, La. — Medicaid reimbursement cuts the Louisiana Department of Health and Hospitals made earlier this year to prevent a deficit in the department’s $3.5 billion budget cost Riverland Medical Center $40,000.

Administrator Vernon Stevens said is glad that DHH Secretary David Hood said Thursday he will restore those cuts.

But Stevens, a past president of the Louisiana Rural Health Association, said a lawsuit filed against DHH by the state’s health care providers, and the department’s underlying budget problems, still remain to be resolved.

Under Louisiana law, virtually all areas of the budget are protected from cuts except higher education and the Department of Health and Hospitals, Stevens pointed out.

So with the budget shortfall DHH now faces, the department is forced to cut where it can, including cutting Medicaid reimbursements.

Stevens has estimated that such cuts could cost the hospital $500,000 a year.

&uot;I sympathize with DHH and Mr. Hood because they’ve had a problem thrust upon them that’s largely not their fault,&uot; Stevens said. &uot;They were directed to take so much out of their budget. Unfortunately, when you do that it affects a tremendous amount of people. We don’t need to pass a tax to fund this … we need to fix the system itself.&uot;

The state’s health care providers are suing the state over reductions in Medicaid reimbursements are getting payments that are at the center of a court dispute.

U.S. District Judge Richard Haik has temporarily blocked the reductions but has not said when he will rule on whether the cuts are legal.

Nursing homes alleged in federal court last week that DHH violated a court order by withholding some of the money they would normally have been paid before the state started a budget-cutting program. Hood maintains he did not violate the order.

The Associated Press contributed to this report.