Edwards to bill taxpayers for more Medicaid?

More Louisiana politicians are discovering you can’t win when it comes to running the state’s two northern safety-net hospitals – and especially taxpayers.

According to the Gov. John Bel Edwards Administration, in the coming weeks resolution will come to the saga of the state’s University Health hospitals in Shreveport and Monroe. The state appeared poised to switch operators from BRF to Ochsner Health Systems.

Under the gun five years ago to outsource operations of state’s charity hospitals after a congressional decision on Medicaid financing would have wrecked the state budget, the Gov. Bobby Jindal Administration quickly had to find private operators for these. Traditional institutional health care providers stepped in – except for north of Alexandria, where only BRF, then known as the Biomedical Research Foundation of Northwest Louisiana, seemed willing.

BRF never had run a hospital before, much less two and one with an academic component (Louisiana State University Health Sciences Center), and the complaints started early. Foremost among that set, state Sen. Greg Tarver accused BRF of shoddy oversight of medical education and failure to pay what it owed the state, largely echoing the LSU System’s charges. Defending it, state Rep. Cedric Glover claimed the LSU Health Sciences Center in New Orleans received higher compensation so BRF was getting shortchanged.

Glover even went so far as to introduce a bill this year that would force equalization of payment levels across all hospitals. But, as Louisiana Department of Health officials noted, comparisons of straight per case reimbursements were extremely complicated because of things such as differing case mixes and federal regulations.

Critics, including the LSU System, won out and the Edwards Administration began a stop-and-start process of wresting control from BRF. Those efforts seem to have arrived at endgame, where the Edwards Administration looks to come down on both sides of the issue, to the consternation of each.

Despite its efforts to keep information under wraps over months of negotiations, state Rep. Blake Miguez discovered preliminarily that the state would boost total annual payments to the new operator by $40 million or 16 percent. The deal also presumably would shunt BRF largely to the sideline, leaving it with minor governance representation, but an amount of involvement which raised the hackles of Tarver.

But if, in fact, inefficiency by BRF caused problems, no increase or one much less than 16 percent at most should suffice. Thus, it seems the Edwards Administration officially would buy the argument made by Glover, whose bill failed.

Yet that bill didn’t ask for additional money, just to move around existing dollars to rectify alleged favoritism. Adding to the mystery: of all the urban parishes in areas with charity hospitals – Orleans and Jefferson, Terrebone, Lafayette, Calcasieu, East Baton Rouge, Ouachita, and Caddo and Bossier – since Medicaid expansion Caddo and Bossier have had the smallest proportional increase in Medicaid patients, who comprise the vast majority of clients of any of the private-public partnership hospitals. (Ouachita wasn’t much higher.)

If anything, that would make UH System hospitals the least likely to see their contract amounts raised. Even more intriguingly, to date the Edwards Administration has cast itself as an economizer, in trying to reduce contracts to all operators.

Should the parameter revealed by Miguez end up as reality, Edwards will have to come up with a pretty good explanation to justify the extra hit to taxpayers, even as privatization itself saved $2.7 billion through 2016.  Hopefully, any potential contract inflation doesn’t represent a backdoor attempt to subsidize money-losing Medicaid expansion.