DHH Receives Final Federal Approval for Public-Private Partnerships

Tuesday, December 23, 2014  |  Contact: Olivia Watkins; (225) 342-7913, olivia.w@la.gov

Baton Rouge, La. -This morning, the Louisiana Department of Health and Hospitals (DHH) received final approval of the hospital public-private partnerships already providing high-quality care to Louisianans. The approval was for the methodology that the State uses to pay the public-private partnership hospitals for the care they provide both to uninsured residents and to Medicaid enrollees. Today's approval was the last federal approval the Department needed to continue operating the partnerships, which have already added new services and increased access for Louisiana residents.

"The public-private partnerships are making access to care for primary, specialty and surgery services a reality for thousands of Louisiana residents," said DHH Secretary Kathy H. Kliebert. "Over the last year and a half, we've seen increased access to urgent care centers, preventative care and disease management that Louisiana historically lacked. We are so pleased to have the final approval from the federal government so that we may continue to care for the health care and wellness needs of our communities."

Today's approval from the federal government came from the U.S. Centers for Medicare and Medicaid Services (CMS). CMS governs how the State uses federal dollars to reimburse hospitals and health care providers for care for the uninsured and Medicaid recipients. Plans for how DHH uses those federal dollars are included in a document called the State Plan and each time DHH makes a change to that plan the federal government must review and approve those changes (called a state plan amendment or SPA).

Governor Bobby Jindal said, "We're pleased with the approval. The partnership hospitals are revolutionizing health care around the state, and now they'll be able to continue their work to reduce patient wait times, expand access to quality care and train the doctors of tomorrow right here in Louisiana." 

The SPA approved today (called SPA 14-25) replaces earlier SPAs that the federal government previously declined to approve. Specifically, SPA 14-25 outlines Disproportionate Share Hospital (DSH) payments for a new category of hospitals, called Louisiana Low-Income Academic Hospitals. Six of the public-private partnership hospitals fall into the category of the Low-Income Academic Hospitals. The remaining three public-private partnerships already have federal approval or did not need federal approval.

The SPA approved today has an effective date of May 24, 2014, which allows payments to be made under its methodology back to the beginning of that state fiscal year, or July 1, 2013. All payments that were previously made to the six public-private partnership hospitals from the effective date forward will be considered made under the newly approved SPA.

In addition to submitting a new SPA for the six partnership hospitals, the State made changes to agreements with the five private partners operating the six hospitals (the Biomedical Research Foundation is the partner for both the Shreveport and Monroe hospitals). Specifically, the changes to the agreements removed DHH from the documents; now the agreements only reference LSU Health Sciences Center and the Division of Administration. The partner agreements that were updated include:

1.     Louisiana Children's Medical Center (partner) and University Medical Center Management Corporation (operating subsidiary)

2.     Biomedical Research Foundation of Northwest Louisiana (partner) and BRF Hospital Holdings, L.L.C. (operating subsidiary)

3.     Lafayette General Health System (partner) and University Hospital and Clinics (operating subsidiary)

4.     Our Lady of the Angels Hospital, Inc. (partner)

5.     Southwest Louisiana Hospital Association d/b/a Lake Charles Memorial Hospital (partner)

The revised agreements also make no mention of the how DHH pays hospitals for the care that is provided to uninsured or Medicaid recipients. Instead, the payment structure is only defined in the State Plan through the now-approved SPA 14-25.

For a copy of the all communication regarding SPA 14-25, including the approval letter, click here. This approval complements earlier approval of SPA 12-63 that governs payments to partner hospital Our Lady of the Lake Regional Medical Center in Baton Rouge.

It is clear that the public-private partnerships are transforming the delivery of care to residents by increasing access to primary and specialty care as well as emergency and urgent care. Some of the most recent achievements include:

• In Baton Rouge, Our Lady of the Lake's clinics have already had more than 126,000 patient clinic visits, including over 30,000 patient visits at the new 24-hour urgent care center that was opened in North Baton Rouge. OLOL is also on track to become a Level I trauma center. Over 15,000 patients have been seen at the Perkins Surgery Center.
• Additionally, in Baton Rouge approximately 80,000 prescriptions have been filled since the partnership took effect in 2013, and the wait time for filing prescriptions has been reduced significantly from 10 days to 10 minutes in most instances.
• In Lafayette, private partner Lafayette General has reopened clinic and hospital capacity that had previously been shuttered or scaled back, including its reopening of a pediatric clinic, a twelve bed medical detox, and returning its orthopedics unit to full-time status.
• In New Orleans, Louisiana Children's Medical Center took over the operations of the Interim LSU hospital. Since completing the partnership, the hospital has increased the emergency department capacity and reopened several medical/surgical inpatient beds and nine inpatient psychiatric beds.
• Under its partnership with Lake Charles Memorial Health System, W.O. Moss in Lake Charles has established a new urgent care clinic, which means that more patients are able to see a physician outside of expensive and ineffective emergency room settings. Physicians are now averaging 28-30 patients per day versus 10 in 2012.
• The partnership in Lake Charles has also led to the introduction of several new specialty care clinics, including an orthopedic clinic and a breast health clinic. Patients who were previously referred out of town for these critical services can now receive them in their home community. Additionally, all previous backlog for receiving an MRI, pulmonology services, or GI scopes has been reduced.
• In Houma, the partnership between Terrebonne General Medical Center and Ochsner has resulted in improvements to patient care with the hiring of new physicians, including a new cardiologist, urologist and family health physician. Two new digital mammogram units have been installed at the hospital and it has instituted a same-day walk-in screening process leading to a 16 percent increase per month in mammograms.
• The Houma partnership has also resulted in expanded urology services - a 41 percent increase in monthly visits. Additionally, it has resulted in an 83 percent increase in urological surgical procedures and a 12 percent increase overall in patient clinic visits. Ochsner has also decreased the wait time for admit screening for diabetes care from 1 hour to 5 minutes and has increased colonoscopy screening by 54 percent.
• In Shreveport and Monroe, University Health has dramatically decreased wait times, for example, reducing MRI appointment times from more than 60 days to 1-2 days and CT appointment times from 14 to 2 days. They have also reduced the clinic appointment backlog from more than 12,000 to less than 1,800 patients.

Accompanying the approval of the SPA was a disallowance for advanced lease payments made by the private partners for the lease of the public hospital facilities. A disallowance from CMS indicates that the federal government does not approve of a payment made with federal match and that it considers a payment to not be allowed by its guidelines. The federal share of the disallowance is $190 million.

DHH disagrees with the disallowance and maintains that the lease amounts were based on independent, third-party assessments. DHH is not a party to the lease arrangements and the advanced lease payments were not used as match to draw down federal funds. DHH will appeal the disallowance, which will have no impact on the State budget. Appeals typically take five to seven years, at which point, if the disallowance still stands, DHH would determine a repayment schedule with CMS.

The Louisiana Department of Health and Hospitals strives to protect and promote health statewide and to ensure access to medical, preventive and rehabilitative services for all state citizens. To learn more about DHH, visit www.dhh.louisiana.gov. For up-to-date health information, news and emergency updates, follow DHH's Twitter account and Facebook.

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