LSU gets partial payment in hospital partnership dispute

The private operator of LSU’s Shreveport and Monroe hospitals responded Friday to an LSU payment demand but with less than the $25 million allegedly owed.

Meanwhile, Gov. Bobby Jindal continued to laud the success of public-private hospital partnerships around the state. In a statement issued by his office, Jindal said LSU leadership has assured that they are “committed to resolving it (the dispute) in a timely manner.”

A simmering behind-the-scenes feud boiled over this week as news broke that LSU dunned BRF Hospital Holdings for $25.3 million in financial obligations overdue under the management contract. LSU’s attorney Pat Seiter accused the private entity of using LSU like its “personal piggy bank” and said the nonpayment had put a significant burden on LSU and its medical school’s financial stability.

On Friday, BRF — also called University Health — made a cash payment of $6.93 million and put another $10.58 million in escrow “to cover payments LSU claims it is owed under unsigned agreements, as payments without executed documents could constitute a violation of certain state and federal healthcare laws.”

Biomedical Research Foundation took over operation of the two north Louisiana hospitals last October. Final contracts have not yet been signed nearly a year later.

In response to the demand letter, BRF and University Health Chairman Steve Skirvanos took issue with both the amount LSU said was owed as well as LSU’s assertion that the private operator was dragging its feet in finishing agreements with LSU. The demand letter set a Sept. 5 deadline for completion of “contemplated transactions.”

Skirvanos told LSU system President F. King Alexander via email that by University Health’s calculations, the net amount due LSU would be closer to $18 million “if we agreed to all of the amounts in the open contracts. We don’t.”

Skirvanos said the demand letter did not paint a complete picture, including that UH has not yet billed LSU for most of the shared services necessary to operate the Shreveport campus and that LSU did not become current on its lease of the BRF research building until seven months after the lease took effect.

LSU also has refused to authorize release of $17 million “in promised funding” for University Health, pending completion of contracts

“On its face, the assertion that UH has failed to complete requisite agreements is simply laughable,” Skirvanos said.

Since June 2013, Skirvanos said UH has asked for independent third parties to participate in all the agreements. “At what point in this process did LSU attain the unilateral right to demand UH to sign agreements that are not consistent with UH’s business purposes? ” he asked.

Follow Marsha Shuler on Twitter @MarshaShulerCNB. For more coverage of the state capitol, follow Louisiana Politics at http://blogs.theadvocate.com/politicsblog/.