MEMO
To: Interested Parties
From: Stephen Handwerk
Date: May 9, 2014
Re: One Week and Counting… No Plan B in Sight for Louisiana’s Hospitals, State Budget
Today marks the one-week anniversary since Gov. Bobby Jindal’s hospital privatization deals were shot down — and the Jindal administration still has offered no Plan B to fix the crisis with our charity and university hospitals or balance the resulting hole in the state budget.
Since last Friday, we have learned the following:
- Under questioning from House Democratic Caucus Chair John Bel Edwards, Department of Health and Hospitals Secretary Kathy Kliebert contended the administration can reach an agreement with the federal government, but she refused to reveal any details of their plan to move forward. As Edwards noted, “The same people telling me we had a successful meeting and a path forward are the same people telling me the plan would be approved.”
- Legislative Black Caucus Chair Katrina Jackson emphasized that the federal government is raising questions not just about the hospitals’ advance lease payments, as the Jindal administration is claiming. Jackson said, “CMS is not just questioning lease payments. They’re questioning the content of contracts.”
- State Treasurer John Kennedy has alerted the administration and legislators that more than $35 million in funding for higher education in this year’s budget is in jeopardy because Jindal has been relying on the advance lease payments to fund our universities. From Kennedy’s appearance this week on the Jim Engster Show:
Kennedy: “My immediate worry is this fiscal year. We have funded this fiscal year, which as you know, ends July 1. We have funded higher education’s budget with some of these advance lease payments, which CMS has ruled illegal to the tune of about $35 million. And when you couple that with some other contingencies which I’m afraid aren’t going to happen, I’m worried that we’re going to have a shortage for higher ed this fiscal year to the tune of $35 to $50 million.”
- Don Gregory, health care adviser to the Public Affairs Research Council of Louisiana, contends that the hospital privatization deals falling through could mean a catastrophic budget deficit in future state budgets of up to $440 million.
- While the Jindal administration has stated their intention to appeal the CMS ruling, they lost a similar appeal just this week in which the state had overbilled the federal government for hundreds of millions of dollars. In addition, Kliebert has acknowledged that appealing the rejection could take a year, leaving Louisiana’s hospitals and state budget in limbo well into 2015.
Given their track record, the Jindal administration’s assurances don’t exactly inspire confidence. And worse, their explanations are full of holes — just like their budget plan. Clearly Jindal hopes to kick the can down the road for the next governor and hope this Legislature won’t hold him accountable for his fiscal irresponsibility.
Finally, Jindal has refused to consider what columnist John Maginnis called “the only real alternative to the hospital partnerships” — accepting billions in federal Medicaid expansion dollars. WWL-TV commentator and Gambit columnist Clancy DuBos has it right: “What Louisiana needs right now is a plan based in reality, not a pipe dream.”
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