- Associated Press - Friday, May 23, 2014

BATON ROUGE, La. (AP) - A revised financing plan for six LSU hospital privatization deals was filed Friday with the federal agency that oversees Medicaid spending, which rejected a previous version.

The Department of Health and Hospitals submitted a new proposal, hoping the U.S. Centers for Medicare and Medicaid Services will be more receptive to the rewritten plan.

“We have been in discussions with CMS about this. We are using their guidance and their advice in developing this state plan amendment,” DHH Secretary Kathy Kliebert said.

But questions remain about previous pieces of the financing arrangements that Gov. Bobby Jindal’s administration worked out with the private managers that took over the LSU hospitals.

The new proposal wouldn’t change existing reimbursement rates to the private hospital managers. Instead, it would establish that hospitals providing services previously overseen by LSU are a new category with a special reimbursement rate. And it would remove any reference to the specific privatization contracts from the financing plan.

CMS has 90 days to review the proposal. Kliebert’s hopeful a decision will come sooner.

The Jindal administration isn’t making changes to the “advance lease payments” that the hospital managers paid upfront as part of the no-bid contracts with the state. CMS officials took issue with those payments.

Even if the federal agency agrees to the reworked payment plan for the hospital managers submitted Friday, it could still object to the advance lease payments and seek reimbursement of federal health care dollars that were tied to those lease payments.

Jindal privatized nearly all the LSU hospitals without waiting for federal officials to sign off on financing arrangements that rely on millions of federal Medicaid dollars.

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