A state lawmaker is raising concerns that a deal to transfer management of the state-owned safety-net hospitals in north Louisiana could cost the state an extra $40 million a year.
Erath Republican Rep. Blake Miguez, a House budget committee member, wrote Gov. John Bel Edwards seeking more information about terms of the contract, which hasn't been completed. He said the Democratic governor is "acting unilaterally and without legislative input or oversight on a significantly large state contract."
Miguez said he's heard that Southeast Louisiana-based Ochsner Health System wants $291 million annually to take over day-to-day oversight of the Shreveport and Monroe facilities. Miguez said that's $40 million more than current hospital manager BRF has been paid.
"At a time when we are working arduously to address budget shortfalls, please indicate what additional services are being provided and how the state can possibly afford an additional $40 million for a single provider in a growing Medicaid" program, Miguez wrote.
The Edwards administration announced the planned management transfer in December, aimed at ending years of disputes over facility operations. Edwards' office wouldn't say Friday whether the deal is expected to cost an additional $40 million.
"We cannot confirm anything with negotiations ongoing," Edwards spokesman Richard Carbo said in an email.
"Before any agreement is finalized, administration officials will make a full public presentation before the Joint Legislative Committee on the Budget," Carbo said.
Ochsner didn't immediately respond to questions about the letter.
BRF, which started as a biomedical research foundation, is running the Monroe and Shreveport hospitals under a 2013 no-bid contract struck by former Gov. Bobby Jindal. The privatization deal has been contentious since it began, with repeated clashes over payment amounts and contract terms. BRF had never previously run a patient-care facility.
The Edwards administration and LSU, which previously oversaw the safety-net hospitals, have sent breach-of-contract notification letters to BRF that claimed the manager, among many charges, was harming graduate medical education at hospitals where LSU's doctors and medical students work and train.
BRF, which manages the two hospitals as University Health System, has responded by saying the facilities suffer from inadequate state funding, financing discrimination against north Louisiana and unreasonable demands from LSU.
Officials hope striking an agreement with Ochsner will remedy the complaints. Ochsner — which owns, manages or is affiliated with more than two dozen hospitals in Louisiana — helps to manage the state-owned, safety-net hospital in Terrebonne Parish, an operating agreement that has generated no widespread criticism.
The paperwork signed so far with Ochsner are non-binding "letters of intent" that spell out plans for the management transfer. But the official contract terms remain to be completed, a task that has taken months. A transition date isn't set.