Gov. Piyush Jindal has apparently produced more smoke and mirrors in the unveiling of the administration’s plans to lease four LSU Health System hospitals in South Louisiana to private medical facilities.
Bruce Greenstein, Jindal’s Secretary of Health and Hospitals, and LSU Executive Vice President Frank Opelka made major productions of the announcement on Monday that Louisiana Children’s Medical Center (LCMC) would take over operations of the LSU Interim Hospital in New Orleans and eventually the as-yet unfinished $1.1 billion new academic medical center.
At the same time, it was announced that Lafayette General Health System would assume operations of University Medical Center in Lafayette and that Ochsner Health System and Terrebonne General Medical Center would partner to run Leonard J. Chabert Medical Center in Houma.
Jindal and DHH officials are calling the deals “partnerships,” but a closer look into the arrangements reveals that the administration may well simply be shuffling Medicaid dollars in a circuitous route in an effort to secure more federal Medicaid matching dollars, a practice that could be frowned upon by the Center for Medicare and Medicaid Services (CMS).
Another problem may arise when the University Medical Center Medical Corp. Board is supplanted by the LCMC which will run the academic medical center as the “sole member” of the University Medical Center’s management board.
That’s because when private property was expropriated for the construction of the academic medical center, it was for a “public purpose,” the operation of a state-run hospital to serve as a safety net for New Orleans’s indigent population. Because the facility will no longer be a state-run hospital under the auspices of LSU, the legality of the expropriations could be called into question.
Opelka, however, said the plan is for LCMC, which already operates Touro Infirmary, to be the parent corporation over Touro, LCMC and the UMC boards.
Monday’s memorandums of understanding (MOU) announced by the administration commit the private hospitals to continue care of the poor and uninsured and to train the state’s future physicians.
As recently as September, the LSU Board of Supervisors approved a plan to lay off 600 personnel at the Interim LSU Public Hospital in New Orleans.
Now, suddenly, the MOUs are announced that miraculously, will make all the planned layoffs unnecessary.
It’s enough to make one wonder what transpired in the three months between September and the first week in December—especially since no official explanation has been given for the sudden reversal. It seems unlikely that such a complex agreement involving the transfer of upwards of $2 billion—or more—in buildings and equipment could be worked out in such a short time.
Negotiations, in fact, will continue in secret on financial arrangements that will be instrumental in any final agreement for the private entities to take over operations of the state hospitals.
The agreements, in addition to requiring nearly $30 million in payments from the private hospitals, call for the state to make higher Medicaid payments to those same facilities.
Hospitals are paid the same rate for Medicaid patients but there are avenues by which additional payments may be made for higher volumes of Medicaid patients. These are Disproportionate Share Hospital (DSH) allotments and the state’s relative new Low-Income and Needy Care Collaboration Agreement (LINCCA).
Additionally, a supplemental Upper Payment Limit (UPL) program for physicians was developed by the state to pay physicians the difference between the average commercial rate and the Medicaid rate.
Under terms of the agreement, the three private hospitals will pay the state almost $30 million in advance financial committees, according to documents provided by Opelka and DHH. Those documents provided little additional information about how the lease agreements will be structured.
So, why would these private medical facilities agree to pay the state to take over state hospitals that are losing money?
The answer to that could lie in those DSH and LINCCA payments made by the state to the hospitals.
If that is the case, the hospitals would be using Medicaid money received from the state to pay back to the state the so-called Milestone lease payments and the state, in turn, would use the lease payments—that same Medicaid money—to leverage more federal Medicaid money with which Jindal would plug a $300 million hole in the state’s Medicaid budget.
Smoke and mirrors.
Louisiana Voice 
100% of all hospital staff will be laid off before this is over to get them off the state payroll All will loose retirement and other benefits Many are within 1-2 years of retirement
Martha Smith
So I ask is what he is doing legal or not? Is he playing Russian roulette with our health care dollars? Now I read where Talbot is already looking for ways to steal the state workers pension dollars in the upcoming session. I would truly like to know why every thing Jindal does is on the down low. It seems to me when your doing something in the dark, you’re doing something that’s not on the up and up. The sad part is there is something very wrong with our system of checks and balances. Why is every one turning their heads, shutting their eyes? If you play with fire long enough sooner or latter you get burned!!
Among the inconsistencies in the Jindal administration’s ostensible position of turning down federal dollars is this apparent scheme to game the Medicaid program [ultimately use Medicaid dollars to match additional Medicaid dollars via what is essentially an upfront loan from the providers]. Of course, the bet is that we (the unwashed) don’t care, or are too stupid to get it and that our D.C. attorneys can convince HCFA that the law permits this.
If the leasing of the State faculties is with in the law and is what is best for all involved , THE NEEDY AND OUR HEALTH CARE TEACHING FUTURE AND OUR HEALTH CARE WORKERS. Then I’m all for it, what worries me is why are all these heals being made in the dark? What happened if the lease as it is called goes through only latter we have the rug pulled from under our health care by the federal government? The answers lay some where between New Orleans , Jindal & the White House. In between we the citizens of this State have to wait for Marcel’s of infermation to be feed to us when ever our leaders feel like it. No more no less . There is a rooster in the hen house and all of our necks are on the line!!!!!:(
Neither! Brilliant Bobby the Blunderer, would never let pesky rules and law interfer with his business practises but where were the dumbdowned legislature when these $ were passed for private insurance companies??? I told you what he was doing and he is not saving any taxpayer money but is lining up and hiding his computer trails so he and teepell can stay on message. What a country??
What a State .The one thing I have learned about Jundal is he only lies when he is talking!!!
Funny thing I never see or hear him speak to our State Media!!!