BATON ROUGE - Late this afternoon, the Louisiana Department of Health (DHH) was notified by the federal Centers for Medicare and Medicaid Services (CMS) that the remaining state plan amendments (SPAs) for the public-private partnerships have been denied. This is an unprecedented step by the federal government that contradicts earlier approval actions by CMS. The Department will appeal the decision by CMS through an administrative appeal. There is no short-term budget impact as a result of the CMS decision.

Below is a statement from LDH Secretary Kathy Kliebert:

"CMS noted that they support the mission of the public-private partnerships and the effort to create equality in the delivery of health care to the residents of Louisiana. This denial by CMS is in stark contrast to earlier approval of four SPAs for the public-private partnership with Our Lady of the Lake (OLOL) in Baton Rouge. The SPAs for OLOL were approved in July of last year and included advance lease payments for four clinics to be operated by the private partner.

In the letter from CMS to LDH, CMS said that the advance lease payments included in the cooperative endeavor agreements (CEAs) are donations to the state. Louisiana officials have continually provided clear evidence that the leases were based on independent, third-party appraisals. The lease agreements included in the CEAs are separate from the reimbursement methodology outlined in the SPAs.

There is no legal basis for the ruling. We are still very confident in the SPAs. In our conversations with CMS officials, they indicated that they want to start early next week discussing a financially viable alternative for the partnerships. The state does have other options to fund the partnerships, including alternative types of uncompensated care payments. We are still confident in our path and that it will ultimately be approved on appeal. 

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.
  • In Lafayette, private partner Lafayette General has reopened clinic and hospital capacity that had previously been shuttered or scaled back due to budget cuts, 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.
  • 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 surgical procedures and a 12 percent increase overall in patient clinic visits. 
  • 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.

The Department has the right to appeal the decision by CMS within 60 days of receiving the denial notice. LDH intends to file a notice of intent to appeal as soon as possible. Once the appeal begins, it will be heard before a CMS hearing officer within deadlines established in federal law. Any further appeals would be heard by the United States Court of Appeals for the Fifth Circuit.