Hospitals for the poor considering walking away from their state contracts

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Hospitals for the poor considering walking away from their state contracts



According to Kevin Litten of The Times-Picayune, the CEOs of seven Louisiana hospitals told Senate Finance members Wednesday that the $137.8 million in proposed “best case” budget cuts would cause dramatic drop-offs in their ability to deliver medical care to the poor ( All of the privatized safety net hospitals, which represent every major population center in the state, are considering walking away from their contracts.


These hospitals, which include University Medical Center in New Orleans and Our Lady of the Lake in Baton Rouge, play a pivotal role in treating the poor and uninsured and are considered a centerpiece of Gov. John Bel Edwards’ Medicaid expansion policy ( policy expands Medicaid eligibility to over 300,000 Louisiana residents, and makes Louisiana the first state in the South to accept Medicaid funding to care for people too poor to afford private insurance, but making too much money to qualify for the program (


The expansion policy also provided an incentive to hospitals under contract for taking on the additional patients. Once the the expansion is in place, hospitals can be reimbursed for the cost of care for the previously uninsured patients they wouldn’t otherwise be paid for treating ( The expansion has been controversial, but Edwards believes it is a much needed program for one of the poorest states in the country with the worst health outcomes.


“By July 1, we expect more than 300,000 hard-working citizens will have the comfort and security of health coverage,” Edwards said. “This will not only afford them peace of mind, but also help prevent them from slipping further into poverty and give them a fighting chance for a better life.”


The budget cuts proposed after the expansion plans were passed have left hospital administrators angry and with few options other than canceling contracts.


David Callecod, CEO of the six-hospital Lafayette General Health System, expressed that the budget cuts are “the ultimate bait-and-switch,” and that if the budgets go through, there is “no way [his] organization can continue to be in this partnership” (


But above all, University Medical Center in New Orleans could present the biggest crisis in the entire partnership system if it terminates its agreement. Greg Feirn, UMC’s CEO, told the Senate Finance committee that the funding cut would be “devastating” to university teaching programs, and would mean that the system would likely cancel the contract (


In rural parts of Louisiana, budget cuts will cause hospitals to ration care in the poorest locations in Louisiana. Rene Ragas, CEO of Our Lady of the Angels hospital in Bogalusa, says, “If we, like the other hospitals, have to ration care, this is going to impact a very rural part of our state with the most vulnerable being affected.”


It is clear that the Louisiana medical system is in a troubling predicament, and officials and experts are attempting to rectify the problem while maintaining the humanitarian efforts of Gov. Edwards to extend medical care to Louisiana’s poor (


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