Transparency in LSU hospital deals questioned

BATON ROUGE (AP) — The contracts that turned over management of LSU hospitals and clinics to private companies have drawn concerns about how much the public will know about the hundreds of millions of taxpayer dollars that flow to the facilities.

The deals allow for legislative audits of public spending, but they also include sweeping clauses that allow the hospital managers to determine what’s considered public record and what should be kept hidden.

Lawmakers and Republican Treasurer John Kennedy have raised questions about access, saying they want to make sure the privatization agreements are a good deal for the state.

Gov. Bobby Jindal’s administration, which brokered the deals, insists the contracts allow for public scrutiny of taxpayer dollars.

Hospital managers say the public financing requires layers of review from federal and state officials to ensure dollars are spent properly. But the managers also appear to have a limited view of what the public should be able to see beyond cost reporting.

If people seek access to information beyond what the privatized hospitals choose to share, they would be left to expensive legal wrangling to determine what the law and the Jindal administration contracts require.

Five LSU hospitals have been turned over to outside managers, and two others were closed and their services shifted to private hospitals in the region. Two more privatization deals are slated to take effect by next year.

Jindal described the deals as a way to cut state costs, improve care for the poor and uninsured and preserve the medical training system.

Kennedy said he wants to be able to make sure those goals pan out.

“This is an enormous amount of Louisiana and American taxpayer money, and these hospitals impact the lives of at least 2 million people,” the treasurer said.

Sen. Dan Claitor, R-Baton Rouge, said he’s concerned about language in the privatization contracts that let the hospital managers determine which records are considered confidential or proprietary and not subject to public records requests. He said he assumes that, in practice, the private entities running the hospitals would slap that language on every document.

He noted the state has previously run into trouble with federal officials over improper Medicaid spending, and those disagreements have cost the state millions to repay federal funds.

“I think we have bright enough minds in this state that if they wanted to make it completely transparent, they could have and still managed to balance privacy interests. Certainly, nobody wants to see any patient records. I just want to know the side of the financial dealings so you’re able to properly evaluate if the state is getting a square deal,” Claitor said.

He noted the state has previously run into trouble with federal officials over improper Medicaid spending, and those disagreements have cost the state millions to repay federal funds.

During questioning at a budget panel hearing, Liz Murrill, a lawyer for Jindal’s Division of Administration, assured Kennedy that the legislative auditor can review any use of public funds. She also said that public documents are required to be produced under state public records laws — but she wouldn’t detail what might fall under that umbrella.

Kennedy said he believes anything that was a public record when the hospital was run by LSU, like salary information and equipment purchases, should remain a public record now that the hospitals are run by private entities.

But the hospital managers have different ideas about what they need to release and how.

Daryl Cetnar, a spokesman for Lafayette General Medical Center, which now manages the LSU hospital in Lafayette, defended the hospital manager’s transparency. But he also said the dollars are flowing now to a private company, not a public one.

“We took the risk to run the hospital as we see fit, so we have to run it how we feel it would be best for our community,” he said.

He said any questions about how public health care dollars are being spent should go to the state health department, not Lafayette General.

In New Orleans, Gregory Feirn is president and chief operations officer of Louisiana Children’s Medical Center, which is leasing the LSU hospital in the city and has taken over operations.

Feirn said the lease contract includes a state-appointed monitor to make sure the hospital manager is following the deal’s requirements. He also said because the public funds flowing to the hospital are through the Medicaid program, they must pay for patient services and must meet federal regulations, with documents filed to back up the reimbursement claim.

“We get reimbursed like every other hospital in America. I don’t know why there’s any distinction. We have to comply with all the federal regulations to get reimbursement,” he said.

Filing a public records request for information about the hospital spending could be tricky.

A person will need to lodge the request with LSU, the state health department or the Division of Administration, depending on the type of funding that is involved, Murrill said. Those will be handled on a case-by-case basis to determine what’s public, she said.

“What’s the money being spent on? If that’s what you’re trying to find out, I think that’s going to be a track-able thing,” she said.