The LSU Board of Supervisors signed off Wednesday on revised deals governing the privatization of six LSU public hospitals, despite reservations voiced by some about a new provision that allows the contracts to be canceled with a 60-day notice.
“That gives us only two months to find a new partner. It’s almost impossible, I think, to find a new partner in two months unless you have done a lot of staff work on a contingency plan,” said Jim McCrery, a board member from Shreveport.
McCrery said he was worried about continuation of health care and of medical education programs.
The LSU board’s approval completes a key step essential to the Jindal administration’s efforts to get the federal funding needed to support the private entities contracted to administer charity hospitals in New Orleans, Lafayette, Bogalusa, Lake Charles, Shreveport and Monroe.
The agreements had to be renegotiated because of objections by the federal Centers for Medicare and Medicaid Services. CMS opposed financial guarantees for higher levels of funding for care of the poor and uninsured in the original documents.
CMS had blocked approval of changing the state Medicaid plan and giving the LSU hospitals a higher level of reimbursement than other community hospitals.
The funding guarantees have been stripped, but the private operators now have the ability to cancel the deals with a 60-day notice for “inconvenience.” In addition, the new contract limits the obligations that the private partners provide “core” and “key” services to poor and uninsured patients.
McCrery and others said a Plan B is needed in case funding problems prompt a private partner to opt for exiting the contract.
“I believe that kind of spade work is currently being done,” said Pat Seiter, a Baton Rouge lawyer representing LSU in the negotiations, agreeing that there needs to be a Plan B.
Board member Scott Ballard, of Covington, said medical consulting firms could step in “if there’s a meteorite event.”
Board member Raymond Lasseigne, of Bossier City, said the hospital and its personnel would still be there.
“LSU would either step in and manage that existing entity. We do have the expertise. We could step in and do that while we look for the right partner,” Lasseigne said.
He also said LSU has leverage because “the withdrawing partner” needs LSU physicians.
“They are not going to cut off their noses to spite their face,” he said.
State Department of Health and Hospitals provided CMS with copies of all the amended agreements to allow the federal agency to begin its review, DHH communications director Olivia Watkins said. It now will provide the federal agency with signed copies of the documents in response to questions raised in August involving deal financing.
Seiter said CMS assured LSU it would “expedite” consideration of the state Medicaid financing change, which would allow money to flow to LSU’s private partners.
Watkins said DHH expects that changes made to the contracts would enable federal authorities to approve the amendments in the state’s plan. “If we are still awaiting approval from CMS at the time when we are scheduled to make payments to the partner hospitals, for which this state plan amendment would apply, DHH would use state funds to make an interim payment to the hospitals,” she said.
Prior to the vote, public health care advocate Brad Ott said he was troubled by a provision that “basically says care for the medically indigent is up for discussion and possibly amendment.”
“These hospitals provide the only effective Medicaid expansion we have in the state,” Ott said. “These decisions and changes are unsettling.”
The board approved the contracts without objection.