LSU hospitals buy time

StartUp

Published Aug 6, 2012 at 6:00 pm (Updated Aug 6, 2012)

LSU Health Care Services officials have concocted a stopgap plan to attract enough federal matching dollars to deal with Medicaid cuts without closing any public hospitals. But there's still work to do.

“Most of the strategies are not renewable,” says Fred Cerise, LSU's vice president for health affairs. “They do, however, buy us some time.”

Gov. Bobby Jindal is also buying time. A recent change to the federal formula for matching Medicaid dollars necessitated about $859 million in program cuts by the state. Jindal has assigned $523 million of those cuts, mostly to the LSU hospital system.

The administration says it hopes the Revenue Estimating Conference will discover some extra dollars the state can use to offset the rest of the Medicaid cuts. One problem: A law approved by the Legislature in the last session—and signed by Jindal—says any unexpected money up to about $205 million must be used to replenish the Budget Stabilization Fund, better known as the “rainy day” fund. The state would need about $91 million to draw enough federal money to avoid further cuts.

Jindal's people say the law in question only applies to dollars recognized before the end of the fiscal year that concluded June 30. But they haven't explained why they believe that, and no one outside the administration seems to agree. State Treasurer John Kennedy says he might seek an attorney general's opinion to help clarify the matter.

“Frankly, it seems very clear that the money goes back into the rainy day fund,” Kennedy says. “I haven't heard why the administration thinks otherwise. I'm certainly willing to listen. I just want to follow the will of the Legislature.”