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“No former elected official, including a legislator, no former member of a board or commission, nor agency head for two years shall assist another person for compensation in connection with a transaction, or render service on a contractual basis for or be employed/ appointed to any position involving the agency by which he or she was formerly employed or in which he/she formerly held office.” (LA Rev Stat § 42:1121)
“…Kristy Nichols is leaving the public sector to become Ochsner Health System’s vice president of government and corporate affairs, the Jindal administration announced today.” (Baton Rouge Business Report, Sept. 15, 2015)
So Nichols will be going to work for Ochsner as a lobbyist. And while state law precludes her lobbying the legislative or executive branches for two years, there appears to be no prohibition to her lobbying local governments (parishes and municipalities) on the part of Ochsner.
Kristy, anticipating the end of her boss’s rocky tenure in January, found her own golden parachute at Ochsner. We don’t know her salary at Ochsner, but we’re guessing it’ll be six figures. Taken at face value, that would normally be the end of the story.
But with this gang, there’s always more than meets the eye. And thanks to our friend C.B. Forgotston who helped us connect the dots, we’re able to shed a little more light into how she parlayed three years of repeated budget crises into such a high-profile private sector job.
Remember the great state hospital privatization fiasco and the contract with 50 blank pages? http://www.modernhealthcare.com/article/20130602/INFO/306029998
The contract obligated the state to long-term spending obligations that will extend decades beyond the Jindal years. Let’s ignore for the moment the fact that the Center for Medicare and Medicaid Services has yet to approve the deal. Instead, let’s explore the Nichols-Ochsner connection.
It was two years ago that the LSU Board of Supervisors signed off on that contract to hand over operation of state-owned hospitals in Lake Charles, Houma, Shreveport and Monroe. The blank pages were supposed to have contained lease terms. Instead, the LSU board left those minor details to the Jindal administration (read: Commissioner of Administration Kristy Nichols).
Eventually details about the contracts emerged, including that of the Leonard J. Chabert Medical Center in Houma. And, thanks to the Louisiana Public Affairs Research Council, that is where we’re able to bring the picture into focus.
Leonard Chabert Medical Center was opened in 1978 as a 96-bed facility with 802 employees but by the time it was privatized, it was down to 63 beds.
In 2008, a hospital-based accredited Internal Medicine residency program was begun. In 2011, the hospital’s revenue was 47 percent uncompensated care for the uninsured, 29.5 percent Medicaid, 13 percent Medicare, 5.5 percent state general fund and 6 percent interagency transfer from other departments with only 1 percent being self-generated.
When the Jindal administration moved to unload state hospitals, Chabert was partnered with Southern Regional Medical Corp., a nonprofit entity whose only member is Terrebonne General Medical Center (TGMC).
TGMC was slated to manage Chabert with assistance with a company affiliated with (drum roll)…..Ochsner Health System, Louisiana’s largest private not-for-profit health system with eight hospitals and 40 health centers statewide.
So what were the terms of the agreement? Five years with an automatic renewal after the first year in one-year increments to create a rolling five-year term.
Though Southern Regional is not required to pay rent under terms of the agreement, the Terrebonne Parish Hospital Service District No. 1 is required to make annual intergovernmental transfers of $17.6 million to the Medicaid program for Southern Regional and its affiliates. Here are the TERMS OF THE OCHSNER DEAL AT LEONARD CHABERT MEDICAL CENTER
Here’s the kicker: the cooperative endeavor agreement (CEA) calls for supplemental payments of $31 million to Ochsner. It’s no wonder the Houma Daily Courier described the deal as “a valuable asset to Ochsner’s network of hospitals” and that the deal “expands Ochsner’s business profile.”
Between 2009 and 2013, Ochsner’s revenue doubled from $900 million to $1.8 billion and the deal only means more revenue for Ochsner, the Daily Courier said. http://www.houmatoday.com/article/20140325/articles/140329692?p=3&tc=pg
We’re certain it’s just coincidence that the LSU Board signed off on a blank contract that the Jindal administration would fill in after the fact.
And it’s just by chance that Kristy Nichols, as Commissioner of Administration, was responsible for that task.
And of course it was just happenstance that Ochsner received that $31 million payment and a mere two years later, just as her reign at DOA was ending, saw the need to bring Kristy aboard as vice president of government and corporate affairs.
So there you have it. All you have to do is follow the money.