Unless a federal agency gives approval to a new financing plan, LSU will stop providing pediatric services at its Baton Rouge Mid-City clinic.

LSU Vice President Fred Cerise said LSU is hoping for federal approval by year’s end of a plan under which a nonprofit organization — Community Health Care Services — would take over operations, with LSU still providing care.

Without approval, some 4,700 children will need to find another place to be their medical home, Cerise said.

The changes affecting the Mid-City clinic located at 1410 N. Foster Drive are precipitated by state budget cuts affecting LSU’s Earl K. Long Medical Center, he said.

The state operating budget that went into effect July 1 reduced funding by 5 percent across LSU hospital and clinic operations, but gave some flexibility in how to make up for the funding loss.

“We looked to alternatives to a lot of cuts. Pediatrics was one we were having a hard time identifying another funding source,” Cerise said.

The plan that’s being pushed with federal health officials would convert LSU’s Mid-City clinic into what is called a “federally qualified health clinic look-alike,” Cerise said.

“If we get this look-alike status, we can continue a lot of these services. If we don’t, we are going to have to close the pediatrics clinic and work to transition kids to other providers,” he said.

Cerise said those dealing with the “look-alike” application have told him they think chances are good for its approval.

The federal status will translate into a higher level of federal reimbursement through Medicaid — the government insurance program for the poor, Cerise said.

The nonprofit operation would take the expense of the pediatric services out of LSU’s hospital budget, Cerise said. The annual expense is about $2.8 million, but the change would probably only be in place for half a year, he said.

The application — filed Aug. 15 — is for a publicly-affiliated program with a community nonprofit board overseeing operations, Cerise said.

The state Department of Health and Hospitals has written a letter supporting LSU’s effort, DHH communications chief Lisa Faust said.

There is already a foundation board affiliated with the Mid-City clinic that was required when LSU received it from Stanocola years ago, Cerise said. The new nonprofit includes some of the members of the foundation board and others, he said.

LSU would enter into an agreement with the new nonprofit regarding clinic operations, Cerise said.

Cerise said LSU decided to go the route because the new health-care act puts an emphasis on federally qualified health clinics in the delivery of care and identifies “a significant amount of funding” for the purpose.

“If we are going to continue to do the same business, it would be a good decision to figure out a way to work with them in the context of the FQHC,” or federally qualified health clinic, Cerise said. With 2014 implementation looming, “we needed to see if we could figure out a model that works for LSU in the FQHC environment.”

Most pediatric services are delivered by LSU faculty physicians at the Mid-City clinic, Cerise said. He said some physicians in training do rotations at the clinic.