Sunday, October 4th2.6°C

Federal officials reject Jindal administration financing plans for LSU hospitals

BATON ROUGE, La. - Federal officials on Friday rejected Louisiana Gov. Bobby Jindal's financing plans for the privatization of six state-owned hospitals that care for the poor and uninsured, dealing a potentially significant blow to the state's health care operations.

The decision threatens deals that already have been used to turn over hospital management and could create massive upheaval in the state's operating budget. The Jindal administration downplayed the significance of the decision, however, saying it will appeal.

The U.S. Centers for Medicare and Medicaid Services, or CMS, notified the state health department that it refused to sign off on the plans. The agency said the agreements don't meet federal guidelines governing how Medicaid dollars can be spent.

"To maintain the fiscal integrity of the Medicaid program, CMS is unable to approve the state plan amendment request made by Louisiana," the federal agency said in a statement. "We look forward to continuing to work with the state to ensure Louisianans receive high quality Medicaid coverage."

Jindal said he will challenge the ruling, which involves hospitals that care for thousands of people and serve as the main teaching facilities for Louisiana's medical students.

"CMS has no legal basis for this decision," the Republican governor said in a statement late Friday. He added: "We are confident that public-private partnerships are the way forward, and we will be working with CMS on alternative funding mechanisms."

Jindal didn't wait for federal approval before he shifted the hospital management, so the hospitals are now operating under financing plans that have been rejected — after being used to balance Louisiana's budget.

However, the governor said there would be no short-term impact on the budget because of the state's appeal. State health department officials said such appeals can take more than a year to be decided, and federal financing will not be disrupted during the challenge.

The rejections involved plans for LSU-run hospitals in New Orleans, Lafayette, Houma, Lake Charles, Shreveport and Monroe.

Privatization deals for the New Orleans, Lafayette and Houma hospitals took effect in June, and the Shreveport and Monroe facilities have been under outside management since October. The Lake Charles hospital was closed, its services shifted to a nearby private hospital.

Lawmakers have worried about the possibility of rejection since the transfers began, but the Jindal administration refused to slow the efforts, expressing repeated confidence that the agreements would win federal support.

Jindal's health secretary, Kathy Kliebert, reasserted her confidence as recently as last week in a meeting with lawmakers.

Privatization deals have taken effect for eight university hospitals and their clinics, with one more pending. They were pushed by Jindal as a way to cut state costs, improve care for the poor and uninsured, and bolster medical training programs.

The deals are costing the state $1.1 billion this budget year, much of it relying on the expected federal health care dollars. The six hospital deals denied Friday were estimated to cost $882 million in the current budget year, most of that assumed to be covered through federal funds.

But only one contractual arrangement has received federal approval: a deal that shuttered LSU's Earl K. Long Medical Center in Baton Rouge and transferred most of its inpatient services to a private hospital, Our Lady of the Lake Regional Medical Center.

The Canadian Press

Read more Business News

Recent Trending

Today's Market
S&P TSX13339.74+97.85
S&P CDNX525.56-0.33
S&P 5001951.36+27.54
CDN Dollar0.7602+0.0057
Natural Gas2.47+0.04

Okanagan Companies
Pacific Safety0.215+0.000
QHR Technologies Inc1.19+0.01
Metalex Ventures0.06+0.00
Russel Metals21.48-0.07
Copper Mountain Mining0.42+0.03
Colorado Resources0.08+0.01
ReliaBrand Inc0.004-0.000
Sunrise Resources Ltd0.02+0.00
Mission Ready Services0.095+0.005
Decisive Dividend Corp3.49+0.45
Diamcor Mining0.90+0.02


2443134lower mission house forsale
more details
Click here to feature your property
Please wait... loading

Living beyond 100

Photo: ContributedThere was a time most careers involved an apprenticeship of one sort another. Some official, others involving years of servitude, and others time simply spent watching and emulating ...

Collateral mortgage

Photo: Thinkstock.comMost of the time I recommend that my clients not take a collateral type mortgage product, as it locks you in with the current lender and at maturity the mortgage is costly to tran...

5 Claim misconceptions

Photo: Thinkstock.comIf you have been hurt in an accident or as a result of medical negligence you will likely look to your friends and family for some advice on how to deal with the situation. These ...




Member of BC Press Council