LSU announces cuts to BMC | $3.1 million in funding lost due to state Medicaid cuts

Published 8:41 am Sunday, July 29, 2012

The Bogalusa Medical Center learned Friday that its share of the $329 million in funding cuts to the LSU system as a result of the overall $550 million in cuts to Medicaid statewide will be approximately $3.1 million.

LSU BMC CEO Kurt Scott said the local toll would involve“closure and consolidation of some of our clinics.”

Specifically, the Memphis Street and Ophthalmology clinics will be closed, Pediatrics/Kids Medicine will be consolidated into Primary Care, and the Podiatry Clinic will be cut.

“Approximately 30 positions will be affected at BMC,” Scott said. “We will take all steps necessary to minimize the impact to our employees and patients.”

The good news is that funding to the LSU BMC residency program, maternity and psychiatry units and other clinics and services was restored, according to information released by LSU Health Care Services Friday.

LSU system officials, who have been meeting to develop a reduction strategy since Gov. Bobby Jindal’s office announced the budget cuts early this month, announced a “series of immediate steps to offset the reductions with the ongoing cooperation of the Louisiana Department of Health and Hospitals and Division of Administration” on Friday.

The steps are designed to preserve the state’s safety-net public hospitals while protecting residency-training programs threatened by budget cuts, they said.

“This is our opportunity to improve operations of the LSU Health System while strengthening its mission of expertly training and educating Louisiana’s next generation of health care professionals,” said Robert Yarborough, chairman-elect of the LSU Board of Supervisors. “We are committed to providing health care and medical education at the best possible value for Louisiana taxpayers.”

Under the plan, spending reductions will be made at each of the LSU System’s 10 hospitals while keeping the hospitals and emergency rooms open and preserving residency-training programs.

“A tremendous amount of thought and deliberation went into this plan, and I am confident it prepares our system for the realities of a rapidly changing health care economy,” said Dr. William Jenkins, president of the LSU system. “We have a duty to ensure that LSU stands on steady ground and that our programs are sustainable. This plan does that, and we must now focus on strengthening our educational mission and exploring new models to continue to provide Louisiana citizens with reliable, accessible, first-rate health care.”

The system reports it is exploring interim revenue-generating options that could mitigate some of the reductions. They include using up to $40 million in operating cash to generate federal matching funds as a way to offset cutbacks.

In addition, at LSU Health Shreveport, LSU will redirect funds associated with the management of grants and contracts, as well as funds from physician practice revenues dedicated to research and in physician practice revenues devoted to support the medical school.

Alternatives are also being developed by the LSU Health Care Services Division, such as certified public expenditures, Upper Payment Limit arrangements and partnerships that ensure maintenance of graduate medical education in the LSU System.

The board of supervisors previously identified maintaining services at health care facilities, especially graduate medical education programs, as its priority.

Jenkins pointed out that the measures allow LSU to use public funds to draw down and retain federal matching funds, but offset only 80 percent of the budget reduction, resulting in the elimination of some services. He added that although the steps are not renewable, the financial measures could provide time for the development of the kind of fundamental change sought by LSU Board while at the same time preserving critical services and graduate medical education programs.

The sale or lease of LSU hospitals to private entities and other public-private partnerships are among the long-term approaches being explored.