In response to federal questions, state health officials scaled back their request for blanket approval of the supplemental Medicaid financing included in the private takeover of LSU hospitals.

The state Department of Health and Hospitals has submitted only a request for approval of a deal involving Our Lady of the Lake Regional Medical Center in Baton Rouge.

The federal Centers for Medicare and Medicaid Services had asked numerous questions about an earlier broad-ranging earlier submission to encompass all potential deals.

Among the questions was how the state could propose a November 2012 effective date when no agreements had been signed. Those questions stopped the approval process.

DHH responded to the federal agency’s questions as it submitted the Lake request.

The answers were specific to the Lake deal, including the revision of the effective date to April 15. That’s when patient care and medical education programs moved to the hospital from Earl K. Long Medical Center.

The development comes as LSU Health reported “milestones” reached since the takeover, including brisk activity at the new 24-7 urgent care center in north Baton Rouge that kept more than 400 people out of hospital emergency rooms.

In addition, the number of physicians in training doing rotations at the Lake jumped from 73 to 163.

CMS approval is needed for what is known as a state plan amendment. Involved is a revision of the reimbursement for out-patient hospital services to allow the extra Medicaid payment to non-state owned hospitals.

The idea is “to encourage them to take over the operation and management of state-owned and operated hospitals that have terminated or reduced services,” according to DHH.

DHH Undersecretary Jerry Phillips said other deals such as those in New Orleans and Lafayette will be submitted separately as they are finalized.

Prior CMS approval is not needed for the supplemental Medicaid funds in the case of the Lake, Phillips said. When approval is given, the increased payments would be authorized retroactive to the April 15 date, he said.

DHH submitted a signed copy of the cooperative endeavor agreement between the state and the Lake and other documents, including outpatient lease agreements, the federal agency will use to determine whether federal laws and regulations have been complied with.

The filing also included the state’s response to a CMS request for “feedback or complaints from the public regarding the cooperative endeavor agreement” and they were addressed.

DHH’s reply dwelled on complaints registered by four legislators during the LSU Board of Supervisors and legislative budget and health committee sessions ranging from the expedited closure of Earl K. Long and the impact on its employees to the impact on patient care, other community hospitals in close proximity to Earl K. Long and the state budget.

“DHH continues to be committed to working with area hospitals to monitor the fiscal impact as a result of the transition of services ... and make adjustments in reimbursement for uncompensated care if triggers are reached,” DHH wrote.

Baton Rouge General Mid City and Lane Memorial Regional Medical Center officials have previously noted the increase in uninsured coming through their doors with Earl K. Long’s cutbacks and ultimate closure.

On the budget question, DHH said there is no cap on the state’s obligation.

“As we write the cooperative endeavor agreements, we give the department flexibility in adjusting payments,” DHH wrote.