BATON ROUGE - Late this afternoon, the Louisiana Department of Health and Hospitals (DHH) was notified by the federal Centers for Medicare and Medicaid Services (CMS) that the remaining state plan amendments (SPAs) for the public-private partnerships have been denied. This is an unprecedented step by the federal government that contradicts earlier approval actions by CMS. The Department will appeal the decision by CMS through an administrative appeal. There is no short-term budget impact as a result of the CMS decision.
Below is a statement from DHH Secretary Kathy Kliebert:
"CMS noted that they support the mission of the public-private partnerships and the effort to create equality in the delivery of health care to the residents of Louisiana. This denial by CMS is in stark contrast to earlier approval of four SPAs for the public-private partnership with Our Lady of the Lake (OLOL) in Baton Rouge. The SPAs for OLOL were approved in July of last year and included advance lease payments for four clinics to be operated by the private partner.
In the letter from CMS to DHH, CMS said that the advance lease payments included in the cooperative endeavor agreements (CEAs) are donations to the state. Louisiana officials have continually provided clear evidence that the leases were based on independent, third-party appraisals. The lease agreements included in the CEAs are separate from the reimbursement methodology outlined in the SPAs.
There is no legal basis for the ruling. We are still very confident in the SPAs. In our conversations with CMS officials, they indicated that they want to start early next week discussing a financially viable alternative for the partnerships. The state does have other options to fund the partnerships, including alternative types of uncompensated care payments. We are still confident in our path and that it will ultimately be approved on appeal.
It is clear that the public-private partnerships are transforming the delivery of care to residents by increasing access to primary and specialty care as well as emergency and urgent care. Some of the most recent achievements include:
The Department has the right to appeal the decision by CMS within 60 days of receiving the denial notice. DHH intends to file a notice of intent to appeal as soon as possible. Once the appeal begins, it will be heard before a CMS hearing officer within deadlines established in federal law. Any further appeals would be heard by the United States Court of Appeals for the Fifth Circuit.