Biomedical Research Foundation's lack of cash continues to worry state officials

Alia Paavola - Print  | 

Louisiana officials are concerned Biomedical Research Foundation's lack of cash and management experience may cause the two hospitals it operates — University Health Shreveport (La.) and University Health Conway in Monroe (La.) — to lose their state Medicaid funding, according to KTBS.

The two hospitals, which were originally part of Baton Rouge-based Louisiana State University Health Care Services, came under private management by BRF in 2013.

Louisiana officials are concerned the hospitals could lose Medicaid funding after BRF breached its contract to operate the hospitals. BRF allegedly owes the state lease payments and has failed to pay physicians at the LSU-affiliated academic medical hospital in Shreveport.

Private partners, such as BRF, that operate the state's former public hospitals are required to pay millions of dollars annually to the LSU system to lease the state-owned hospitals. This funding to LSU then gets transferred to the Louisiana Department of Health and Hospitals, which uses the money to match federal Medicaid dollars.

"The [payment] model works in other areas because the lessee has funding to pay the lease to the lessor. The difficulty in the Shreveport privatization is the lack of capital held by [BRF]," Roxanne Townsend, a healthcare consultant, wrote in a letter to the LSU Medical School Chancellor, according to KTBS.

State officials and BRF are currently in a 45-day negotiation period to resolve the breach of contract issue.

Due to concerns with BRF, Louisiana officials have been searching for a new partner to take over LSU's privatized hospitals for years, according to the report.

In 2015, Louisiana officials attempted to oust BRF as the hospital operator and hire Academic Health, a nonprofit organization, to take over. BRF sued the state over their ouster attempt and won. A judge ruled the state didn't do enough to maintain the partnership. Steve Skrivanos, former chairman of the BRF who is now University Health's board chairman, threatened to sue the state again if officials try to end the partnership this year. 

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