BATON ROUGE, La. (AP) — Federal officials on Friday rejected Louisiana Gov. Bobby Jindal's financing plans for the privatization of six state-owned hospitals that care for the poor and uninsured, dealing a potentially significant blow to the state's health care operations.
The decision threatens deals that already have been used to turn over hospital management and could create massive upheaval in the state's operating budget. The Jindal administration downplayed the significance of the decision, however, saying it will appeal.
The U.S. Centers for Medicare and Medicaid Services, or CMS, notified the state health department that it refused to sign off on the plans. The agency said the agreements don't meet federal guidelines governing how Medicaid dollars can be spent.
"To maintain the fiscal integrity of the Medicaid program, CMS is unable to approve the state plan amendment request made by Louisiana," the federal agency said in a statement. "We look forward to continuing to work with the state to ensure Louisianans receive high quality Medicaid coverage."
Jindal said he will challenge the ruling, which involves hospitals that care for thousands of people and serve as the main teaching facilities for Louisiana's medical students.
"CMS has no legal basis for this decision," the Republican governor said in a statement late Friday. He added: "We are confident that public-private partnerships are the way forward, and we will be working with CMS on alternative funding mechanisms."
Jindal didn't wait for federal approval before he shifted the hospital management, so the hospitals are now operating under financing plans that have been rejected — after being used to balance Louisiana's budget.
However, the governor said there would be no short-term impact on the budget because of the state's appeal. State health department officials said such appeals can take more than a year to be decided, and federal financing will not be disrupted during the challenge.
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