BATON ROUGE (AP) — New hospital privatization contracts won backing Wednesday from LSU's governing board, enabling hospital managers to leave the deals more easily and imposing fewer restrictions about services they must offer patients.
The Board of Supervisors approved the rewritten contracts without objection, part of an effort by Gov. Bobby Jindal's administration to win federal approval to keep Medicaid dollars paying for the privatization arrangements.
The contracts govern the management transfer of hospitals in New Orleans, Lafayette, Bogalusa, Shreveport and Monroe and a deal that closed LSU's Lake Charles hospital, moving its inpatient services to a private hospital.
In May, federal health officials rejected prior financing plans for the privatization deals and pushed for a rewrite of the contractual arrangements. The nearly 400-pages of documents backed by LSU leaders addressed the concerns raised by the U.S. Centers for Medicare and Medicaid Services and changes sought by hospital managers.
“This is a cooperative endeavor agreement that everyone can sign, and that's a great relief to us,” said Larry Hollier, chancellor of the LSU Health Sciences Center-New Orleans.
Several LSU board members raised concerns about the ease with which hospital managers can now exit the deals, saying they want the university system to devise backup plans if a privatization deal collapses.
The federal Medicaid agency sought to have provisions of the contract removed that promised certain levels of "required funding" for the privatization deals, according to LSU. With their financing less certain, the hospital managers pushed back and got the ability to cancel the contract without cause with 60 days written notice.
“It's almost impossible, I think, to find a new partner in two months,” said board member Jim McCrery, a former congressman from Shreveport.
He urged the LSU System to find other potential hospital managers who might be willing to step in and run a hospital if a facility operator decides to walk away.
“What we would expect is that the partners will continue to perform as they have in the past as long as there's funding,” said Patrick Seiter, a lawyer for LSU.
But LSU isn't in charge of the funding levels, which are set by the governor and state lawmakers.
Board member Ray Lasseigne suggested LSU could step in and manage a hospital while looking for a new manager, if a privatization deal collapses, though McCrery questioned if the university had the personnel for such an arrangement.
Also changed under the new contracts, hospital managers can more easily discontinue services that had been required under the previous deals.
“This is undoing everything from what I can see,” said Brad Ott of New Orleans, who relies on the LSU-owned hospital clinics for regular patient care and is critical of the privatization deals.
Jindal privatized nearly all the LSU hospitals and their clinics over the last year through no-bid contracts. Under most deals, the management company of a nearby hospital took over operations of the LSU facilities. Three contracts closed an LSU hospital and shifted its services to private facilities.
– by AP Reporter Melinda Deslatte
