The University and Gov. John Bel Edwards have officially filed separate breach of contract notices to the Shreveport-based Biomedical Research Foundation that controls North Louisiana’s safety net hospitals.
The breach of contract notices are the first step in the Governor’s Office and the University’s effort to remove BRF as the operator of the safety net hospitals, according to The USA Today Network of Louisiana. The most recent notice is the third BRF has received since 2015, with the first coming from former Gov. Bobby Jindal’s office.
In 2013, Congress passed legislation that revoked federal funding for the state’s health care expenses, originally passed in 2005 after Hurricane Katrina and Hurricane Rita damaged much of the state. Jindal turned over the operations of all state safety net hospitals to capable, private or non-profit operators to circumvent a fiscal disaster for the state.
Most of the safety net hospitals operations went to experienced operators on short notice, said associate professor of political science at LSU-Shreveport Jeffrey Sadow.
However, the two northern hospitals in Shreveport and Monroe had been run by the LSU system for years, and there was no clear, experienced operator in the region. That’s when BRF came into the equation.
The LSU system alleges in the breach of contract notice that BRF has not made on-time contracted payments. “The way cashflow works is sometimes you have a lot going out without a lot coming in … and BRF, as a result, had trouble paying bills on time,” Sadow said.
BRF cited the unbalanced funding model that has contributed to their lack of funds in a press release. “North Louisiana hospitals get only 32 cents per patient for every dollar received by New Orleans,” said Chair of BRF Malcolm Murchison in a press release. “We will fight for a funding model that treats the citizens of North Louisiana fairly, and provides for adequate health care for those who need it most.”
Further, BRF said it is “not going to prioritize paying LSU ahead of the needs of [its] patients…” and that the state’s failure to fund as promised and LSU’s “failure to document its claims have caused” BRF to withhold payments.
If BRF is removed, there are other options LSU and the Governor’s office are looking into to take over operations. Sadow said the less “politically problematic” organization to take over operations is the Ochsner Health System, a not-for-profit health care provider just outside of New Orleans, which has a heavy presence in South Louisiana. Willis-Knighton Medical Center, on the other hand, has a stronghold in the North Louisiana region. If they were to receive the contract, Willis-Knighton would nearly have a monopoly in the region, Sadow said.
The next step after the breach of contract notice is a time of 45 to 60 days to outline and make corrective actions before going to court to remove BRF as the operator of University Health in Shreveport.
The Governor’s Office did not respond to a request for comment.