BATON ROUGE -- The private operators of LSU's charity hospitals and clinics are in line for a $135 million boost in their payments as part of new deals struck by Gov. John Bel Edwards' administration, and the university's medical schools will benefit from some of the new money.
State lawmakers are being asked Friday to increase financing for the privatization deals to nearly $1.3 billion in the current budget year, only four months after lawmakers were told the previous level of funding was sufficient.
"I think a lot of members have some significant questions on the increase to the (hospital) partnerships. Obviously, I'm included in that," said House Appropriations Chairman Cameron Henry, R-Metairie.
The money for the hospital and clinic operators is part of a larger budget adjustment requested by the Louisiana Department of Health at Friday's meeting of the joint House and Senate budget committee.
Jeff Reynolds, chief financial officer for the health department, said $135 million is a financing increase for the private managers that have taken over LSU's hospitals, clinics and patient services. He said the additional payments are part of the renegotiated deals recently worked out by the Edwards administration.
Part of the increase is coming from increased federal Medicaid financing.
The state must put up money to draw down the federal dollars. It is using money from LSU's New Orleans and Shreveport medical schools, along with money from community hospitals that work with the privatized LSU facilities as the match to get the federal Medicaid financing.
It is unclear if the community hospitals will get those dollars repaid in some fashion.
But Commissioner of Administration Jay Dardenne, the governor's top budget adviser, said a portion of the new money will flow back to the university medical schools.
The renegotiated privatization deals crafted by the Edwards administration included provisions in which some of the hospitals will be paying more money for the services of LSU's doctors who work at the hospitals.
"We have to take care of the needs of the medical schools and the medical training that's provided at a number of the partner hospitals, and those obligations weren't adequately addressed in the budget that was enacted," Dardenne said. "We've got new physician service agreements in place that will drive some of the dollars back to the medical schools."
Henry questioned how the dollars would be spent, if the state would be on the hook for increased payments to the hospitals in later years and if Louisiana could afford such a commitment.
"Is this money they anticipate receiving next year? Or is this just a one-time payment to them? If so, what services increase? And what happens when the money goes away?" he said.
Henry said he wanted to know why the dollars weren't available when lawmakers were crafting the budget in June, when they were told the previous level of agreed-upon financing was sufficient for the privatization agreements.
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