La. AG: Approval not needed for LSU hospital deals

Show caption
/

“Public health care is vitally important, and change to such a vital industry must be done with caution and full consideration to those the industry serves.” Rep. jake brossett, D-New Orleans

Gov. Bobby Jindal’s plans to privatize the LSU-run public hospitals that care for the poor and uninsured don’t require legislative approval, the Attorney General’s Office said Thursday.

The opinion from Attorney General Buddy Caldwell’s office was released to state Rep. Jared Brossett, D-New Orleans, who asked for the legal guidance.

Jindal health care officials have said they didn’t intend to seek a legislative vote for the individual privatization agreements because the law doesn’t require approval.

Assistant Attorney General Jessica Thornhill, author of the opinion, wrote that prior to 2003, the LSU Board of Supervisors was required to get legislative approval for a hospital lease. But lawmakers amended the statute that year, “and in doing so specifically removed that requirement.”

“Therefore, the legislature’s intentional removal of the requirement for legislative approval to lease an entire hospital facility amounts to a clear indication that the legislature intended to permit such a lease without their approval,” Thornhill wrote.

Brossett was pleased with a portion of the opinion that says the hospital leases must include a provision that assures the leased facilities continue to provide the same level of health care services as required by law.

State law requires legislative approval before an emergency room can close or before cuts larger than 35 percent of the prior year’s spending can be made, among other provisions.

“Public health care is vitally important, and change to such a vital industry must be done with caution and full consideration to those the industry serves,” Brossett said.

Jindal is seeking to privatize all but one of LSU’s 10 hospitals as a way to cut costs.

Only one deal has been finalized, which will close the north Baton Rouge public hospital, LSU Earl K. Long Medical Center, on Monday. The deal will shift most of the hospital’s services and turn over its outpatient clinics to a private hospital, Our Lady of the Lake Regional Medical Center, off Essen Lane in south Baton Rouge.

Agreements for a half-dozen other hospitals are currently being negotiated.

Hefty savings from the privatizations are assumed in Jindal’s budget proposal for the upcoming 2013-14 fiscal year. But none of the remaining financial arrangements has been completed — or released publicly.

The university-run hospitals provide safety net care for the uninsured and help train most of the state’s medical students.