The state will submit a new financing plan for the privatization of LSU hospitals by week’s end, the Jindal administration announced late Tuesday.
The federal Centers for Medicare and Medicaid, called CMS, rejected Louisiana’s initial plan in early May. The agency had problems with the plan’s use of more than $260 million in advance lease payments provided by two entities taking over operation of LSU public hospitals.
The rejection put in limbo the financial deals for six of the nine LSU hospitals involved in privatization efforts, including those in New Orleans, Lafayette and Houma.
In a news release, state Department of Health and Hospitals Secretary Kathy Kliebert said the new plan would address CMS concerns and requirements for approval.
“Our discussions with CMS officials over the last few weeks have been incredibly helpful in crafting ... a new state plan amendment,” Kliebert said. “CMS affirmed that the partnerships are a workable model to serve Louisiana’s uninsured and low-income residents. I am hopeful that the new state plan amendment we will submit Friday will satisfy the federal government’s requests for a sound reimbursement methodology and ensure the sustainability of these critical reforms.”
The rejected plan mentioned the cooperative endeavor agreements to implement the public-private partnerships. Those agreements, among other conditions, spell out lease terms and the ability of partners to pay leases years in advance. The new plan won’t include that linkage and propose a new reimbursement methodology for Low Income Academic Hospitals.
Emergency rules are being published at the state level to implement the reimbursement change because of administrative rule-making requirements.