Quin Hillyer: Obama plays politics with Louisiana’s health

The Obama administration strikes again. Again, ordinary Louisiana citizens are the victims of the president’s petty politics.

That’s the ultimate takeaway from the Obama team’s May 2 letter disapproving the state’s new management system, implemented by Gov. Bobby Jindal last year, for Louisiana’s so-called “charity” hospitals.

Granted, this federal-state dispute, potentially devastating for the state budget (but not the federal one), is hideously complicated. Each side can make reasonable arguments on technical/legal grounds. But this is an administration, especially in its Department of Health and Human Services, that has blown holes through all ordinary limits on its discretionary authority. Compared to all the (illegal) waivers DHHS has granted from statutory Obamacare requirements, the leeway Louisiana desired for its hospital system was quite small.

The Obamites easily could have approved Louisiana’s new arrangement. But when given a chance to twist a political knife in Jindal’s ribs, they chose the knife job — even though it will be Jindal’s innocent constituents, not the governor, whose blood will be shed if the Obamite decision isn’t reversed.

In a hyper-simplified nutshell, here’s what happened: First, the federal government cut the percentage of health care costs for which it would reimburse Louisiana. (This is Exhibit A for why Jindal doesn’t trust the feds to honor their promises to pay 90 percent of future costs of Obamacare Medicaid expansions. Federal budgeteers often change the terms of federal-state cost shares.)

Jindal responded with a major, intelligent reform: His administration leased out the charity hospitals to private (nonprofit) hospital managers, decreasing the state’s administrative burdens while using the lease payments to substitute for the sudden drop in federal funds.

The governor had good reason to expect federal approval. First, he knows the regulations thoroughly: He was assistant secretary of DHHS 12 years ago; six years before that, as a 24-year-old wunderkind, he already understood the regs better than the feds themselves, convincing them that Louisiana’s plan to close a huge budget gap in 1996 was consistent with federal law.

Second, the Obama team quickly had given four approvals for virtually identical lease arrangements with Our Lady of the Lake Hospital in Baton Rouge — including a large “advance payment” (akin to any apartment renter’s one month “down payment”) of the sort to which the same Obama team is now objecting in the larger lease deals at issue. In short, the feds are now reversing the interpretation of the law they made just last July.

The second indication that the Obama team is playing politics — standard operating procedure from a president who repeatedly has treated Louisiana with contempt — is that its denial letter was so precipitous. According to Jerry Phillips, a program consultant for the LSU health system who until March 10 was undersecretary of the state Department of Health and Hospitals, the federal statute provides a 90-day “clock” for formal negotiations/counterproposals if the feds see serious objections to a state plan. In this case, he said, the Obama team did not provide that grace period.

“In almost 25 years with DHH,” Phillips said, “I’ve never seen the federal government issue a denial of a state plan amendment (without providing) the 90-day clock.”

Parts of the May 2 denial letter from the feds are almost indecipherable bureaucratese, even for experts inclined to see dangers in Jindal’s approach.

“The May 2 letter is not clear, as to what the intent is,” said former state Medicaid Director Donald Gregory, who last December suggested the Jindal lease plan might prove tough for the feds to swallow.

“We’re trying to work with (the federal regulators) to understand better what their objections are, to clarify what we think are standard business procedures,” said Frank Opelka, LSU’s executive vice president for health care policy, who seemed somewhat flummoxed by the denial letter.

Whether for political reasons or because of bureaucratic obstinacy, the federal refusal to approve the charity-hospital lease plan is bad for Louisianans’ health. The Jindal administration notes that the lease partnerships already have resulted in the addition of nine psychiatric beds at the LSU DePaul campus, 10 emergency “flex” beds at the Interim LSU Hospital, shorter wait times and increased provision of care systemwide, measurably greater use of clinics rather than overburdened emergency rooms, more advanced mammography units and increased colonoscopy screening.

All of which is in jeopardy from federal bullheadedness over a dispute whose practical impact, in terms of dollars, amounts to little more than a rounding error in the federal budget.

Thus, in the service of “progressive” politics, Obama’s team blocks Louisiana’s real health care progress.

New Orleans native Quin Hillyer is a contributing editor for National Review. You can follow him on Twitter, @QuinHillyer, or on his blog at blogs.theadvocate.com/quin-essential.