CMS officials have rejected Louisiana's plan that has leased out several Louisiana State University hospitals to private operators, according to an Advocate report.
At issue is advance lease payments made by the private hospitals to the state government. Under the deal, hospitals agreed to lease and operate LSU hospitals while paying a higher upfront portion of their long-term lease agreements, which would lessen over the life of the deal.
However, CMS said the advance lease payments could result in extra federal Medicaid dollars, which could not be allowed. Gov. Bobby Jindal said his administration plans to appeal the decision. An official who helped coordinate the privatization plan told the Advocate that it appears CMS didn't have a problem with the leases themselves, but more so with the advance payments.
Last year, Gov. Jindal's administration approved a plan to shift operations of nine of LSU's 10 public hospital to private healthcare organizations. Last June, LSU closed W.O. Moss Regional Medical Center in Lake Charles, and Earl K. Long Medical Center in Baton Rouge closed last April. Seven other hospitals have started new operating agreements with several private health systems throughout the state. Lallie Kemp Medical Center in Independence is the lone remaining public hospital within LSU.
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