OLOL-LSU deal gets federal OK

Federal health officials gave approval Monday to the final piece of the financial deal involving LSU’s partnership with Our Lady of the Lake Regional Medical Center in Baton Rouge.

The Centers for Medicare and Medicaid Services signed off on the arrangement in which the Lake took over operation of LSU outpatient clinics and urgent care center.

CMS approved a compensation arrangement in which the Lake receives 95 percent of allowable Medicaid costs.

It had previously approved the same compensation arrangement involving inpatient care of the state’s poor as well as a supplemental Medicaid payment to the Lake “to encourage them to take over the operation and management of state-owned and operated hospitals that have terminated or reduced services.”

The approvals guarantee extra Medicaid funding for inpatient and outpatient care of the poor and uninsured treated at Our Lady of the Lake. The reimbursement is more than other area hospitals receive.

“We have all the pieces we need, all the reimbursement strategy for inpatient and outpatient care,” state Department of Health and Hospitals Secretary Kathy Kliebert said. “We weren’t surprised.”

CMS did not raise any “red flags” in the review process, Kliebert said.

The Lake deal is the first of LSU’s public-private partnerships involving the takeover of hospitals to gain CMS approval. Others involving LSU hospitals across south Louisiana, including those in New Orleans and Lafayette, are pending.

“Again we are confident,” Kliebert said.

Gov. Bobby Jindal’s office announced the final CMS approval in a news release which quoted Jindal calling it “truly a historic day for our partnerships in Louisiana.”

The Lake became home in April for LSU’s medical education program and in-patient care that had been delivered at the public Earl K. Long Medical Center in north Baton Rouge.

Originally, LSU was going to continue to operate its clinics across the city. But the federal health agency refused to go along and the Lake stepped in to operate them.

Jindal said the Lake has served more than 25,000 patients through the LSU partnership as well as improved and streamlined how patient prescriptions are being filled.