Gov. Bobby Jindal’s plan to privatize University hospitals has cost $52 million less than expected. According to the Department of Health and Hospitals, the state spent just over $1 billion on the deals to remove the hospitals from the LSU System during the fiscal year that ended June 30.
The privatization deals for most of the LSU hospitals have resulted in the management companies of nearby hospitals taking over operations at the University hospital. Three University hospitals were closed as a result.
DHH Secretary Kathy Kliebert said she was pleased with the outcome of the privatization deals.
“The privatized hospitals are working well for the individual and working well for the state,” Kliebert said.
LSU’s Shreveport hospital, now under the management of the Biomedical Research Foundation of Northwest Louisiana, had the most savings of all the hospitals, costing $42 million less than expected.
The privatization deals have also attracted controversy.
A lawsuit was filed to petition the closing of the Huey P. Long Medical Center in Pineville earlier this year, claiming lawmakers did not follow proper procedures in discussing the closure and arguing the legislation should be declared null and void.
Federal officials with the Centers for Medicare and Medicaid Services rejected proposed financial arrangements for the privatization of six University hospitals earlier in 2014 because the plan did not follow federal regulations. DHH is still negotiating revised financing plans for the hospitals.
According to DHH Undersecretary Jeff Reynolds, it is still unclear if the surplus will carry over to the next fiscal year.
“Some programs are over budget, some programs are under budget,” Reynolds said. “The $52 million will be combined with other programs in fiscal year 2014. On Oct. 1, we will know how much of the money can be carried over.”
Kliebert said the DHH budget for fiscal year 2015 has been adjusted based on reported monetary reimbursements to private hospitals for care of uninsured individuals.
The current budget for fiscal year 2015, signed by Jindal in June, has a $2 billion increase in government payments to private health care providers and $3 million increase in payments to public health care providers. The CMMS has scheduled a hearing for September to reconsider the decision to disapprove Louisiana’s Medicaid plan amendments.