The LSU Board of Supervisors on Wednesday cleared the way for Our Lady of the Lake Regional Medical Center to take over LSU outpatient clinic operations in Baton Rouge.
No financial details of the deal were discussed prior to the board approving the change.
After the meeting, LSU System Executive Vice President Frank Opelka provided documents indicating the Lake will pay at least $3.8 million annually to lease three clinics and a surgery center and associated equipment.
The state health agency has set a $60 million cap on payments to the Lake for clinic operations, Opelka said. “There’s a shared savings plan based on efficiencies” under which the Lake can benefit financially for keeping costs down, he said.
The LSU board approval came as it adopted an amendment to the 2010 cooperative endeavor agreement under which the Lake becomes home to inpatient care and medical education programs currently located at LSU’s Earl K. Long Medical Center. The north Baton Rouge hospital is scheduled to close April 15.
LSU originally had planned to continue operating the clinics but the federal Centers for Medicare and Medicaid Services rejected its plan to run them under LSU’s hospital in Lafayette. Now, the Lake will take over those as well effective April 15.
The copy of the document made available to the media had blanks in the spots where financial terms were delineated.
After the meeting, LSU System President William Jenkins said his copy of the amendment did not contain numbers either.
Jenkins signs the document on behalf of the board. He said the numbers will be in place before he signs the document.
Opelka gave a brief outline of the outpatient agreement among the state, LSU and the Lake. He said the Lake will be paid 100 percent of the uninsured care costs and 95 percent of the higher Medicare rate for Medicaid patient services.
He said that will result in savings because LSU has been paid 100 percent of the Medicare rate for Medicaid patients.
Opelka said the leases and subleases are all at fair market value.
Opelka said the Lake will lease LSU’s North Baton Rouge Clinic and Urgent Care Clinic, 5439 Airline Highway, and the LSU Surgical Center with its eye clinic, 9032 Perkins Road. It will sublease LSU’s Mid-City Clinic, 1401 N. Foster Drive, and another one at the Leo S. Butler Center, 950 E. Washington St.
According to information provided by Opelka, the North Baton Rouge Clinic with its Urgent Care addition will lease for $750,494 annually; Surgical Center, $1.73 million; Mid-City, $328,822; and Leo S. Butler, $40,687. Operating costs are on top of the lease payment, the document states.
Opelka said the equipment lease value “to date is in the range of $800,000.”
“It is a continuous, dynamic process of assessment of functionality and need,” he said.
The LSU board-approved agreement also formalizes “the graduate medical education commitment and residency caps,” Opelka said, referring to the number of physicians in training that help deliver the care.
Opelka said LSU is seeking federal approval to keep the residency caps intact through a merger with the Lake. He said it may take six months to get a decision.
Also Wednesday, the LSU board approved a memorandum of understanding authorizing negotiations between LSU Health Shreveport and the Biomedical Research Foundation that could lead to the foundation taking over operations of LSU hospitals in Shreveport and Monroe.
The foundation already has ties to LSU. The resolutions supporting the move noted that the foundation has provided in excess of $40 million in research for LSU Health Shreveport and facilities research on eight floors in the Biomedical Research Institute building located on the Shreveport campus.
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