House says ‘no’ to putting millions of dollars in escrow

The Louisiana House rejected an attempt Thursday to put $38 million in escrow until a resolution is reached on the Jindal administration’s hospital financing plans.

At issue is the federal government’s rejection of the way Gov. Bobby Jindal structured the finances for private hospitals treating the poor on the state’s behalf. Private hospitals are taking care of patients once seen by LSU public hospitals.

The federal Centers for Medicare and Medicaid Services, called CMS, rejected the Jindal administration’s financial plan in May. The rejection creates problems because the governor set his plan in motion without waiting for federal approval. CMS had problems with the plan’s use of more than $260 million in advance lease payments provided by two entities taking over operation of LSU hospitals in New Orleans and Lafayette.

With more payments scheduled to be made before CMS makes a decision on a new plan to be submitted Friday by the Jindal administration, state Rep. John Bel Edwards, D-Amite, wanted to shove the revenue into an escrow account rather than allow the state to rely on it. “This is our last opportunity — right here, right now on this bill — to stop digging the hole deeper,” Edwards said.

He made his move on House Bill 1094, which addresses supplemental needs in the current state fiscal year.

HB1094’s sponsor, state Rep. Jim Fannin, R-Jonesboro, fought back, arguing that it was unnecessary to put the payments in escrow. He noted that the state is moving forward on reaching a resolution with CMS.

State Rep. Sam Jones, D-Franklin, said not putting the money in escrow would be kicking the can down the road.

“We don’t know that we have a can,” Fannin retorted.

The Louisiana House rejected Edwards’ amendment with 30 voting for it and 63 voting against it.

With the amendment decided, legislators turned their focus back to the supplemental budget.

HB1094 shores up $75 million in shortfalls that opened up in public school funding, inmates’ housing, legal judgments and the Taylor Opportunity Program for Students, or TOPS.

The House voted 85-8 in favor of sending the legislation to the state Senate for debate.

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