SLS 16RS-4024 ORIGINAL
2016 Regular Session
SENATE CONCURRENT RESOL UTION NO. 143
BY SENATOR PEACOCK
ADMINISTRATION DIVISION. Directs the commissioner of administration to provide
for the payment of legacy costs associated with or relating to hospitals.
1 A CONCURRENT RESOL UTION
2 To direct the commissioner of administration to prioritize payment of legacy costs borne by
3 the LSU Health Sciences Center at Shreveport, the LSU Health Sciences Center at
4 New Orleans, and the LSU Health Care Services Division associated with the
5 privatization of state hospitals; and to develop and report to the legislature
6 concerning a plan for permanent funding of such costs.
7 WHEREAS, a sudden reduction in federal funding for the Louisiana Medicaid
8 program was included in a sweeping transportation bill passed by the United States Congress
9 and signed into law on July 6, 2012 and resulted in a net decrease of over eight hundred fifty
10 million dollars in the Medicaid budget; and
11 WHEREAS, pursuant to this dramatic cut to Medicaid funding, the Department of
12 Health and Hospitals (DHH) addressed the shortfall by eliminating funding for state
13 hospitals operated by the Board of Supervisors of Louisiana State University and Agriculture
14 and Mechanical College (LSU); and
15 WHEREAS, DHH developed public-private partnerships for the delivery of health
16 services at LSU hospital facilities operated by private healthcare enterprises, with the terms
17 and conditions for such service delivery set forth in cooperative endeavor agreements among
18 the state, LSU, and private providers; and
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SLS 16RS-4024 ORIGINAL
1 WHEREAS, although the cooperative endeavor agreements address the delivery of
2 health services as well as $167 million in lease payments to the state for the use of the public
3 hospital buildings and equipment, they did not address the liability of residual hospital
4 expenses, or "hospital legacy costs"; and
5 WHEREAS, hospital legacy costs include Office of Risk Management costs
6 associated with the hospitals for five years after the transfer of the property, termination pay,
7 unemployment pay, retiree health insurance for the life of the retiree, retiree life insurance,
8 medical records for ten years, and property maintenance until the property is repurposed; and
9 WHEREAS, for fiscal year 2014 and 2015, funds were not appropriated to LSU to
10 cover the hospital legacy costs leading to $53 million in funding stripped from the
11 Shreveport medical school operating budget and $94 million in funding from the Health
12 Care Service Division; and
13 WHEREAS, for the current fiscal year 2016, the legislature appropriated sufficient
14 funding to cover the hospital legacy liabilities; and
15 WHEREAS, for the upcoming fiscal year 2017, the executive budget included
16 funding to cover most of the hospital legacy for the Health Sciences Centers in Shreveport,
17 New Orleans and the Health Care Services Division; and
18 WHEREAS, although the hospital legacy cost have decreased by almost half since
19 fiscal year 2014, legacy costs will remain for the foreseeable future to cover the health
20 insurance of all former LSU hospital employees, as well as maintaining the property until
21 said property may be repurposed; and
22 WHEREAS, the privatization of the hospitals has allowed the LSU Health Sciences
23 Centers in Shreveport and New Orleans to refocus on its mission of medical education, it has
24 left the LSU medical schools vulnerable to an ongoing residual hospital liability of $50
25 million, and a state responsibility to its retirees, without a recurring revenue source; and
26 WHEREAS, if these hospital legacy costs are not appropriated in the budget on an
27 annual basis, it would be to the detriment of medical education for the state.
28 THEREFORE, BE IT RESOLVED that the Legislature of Louisiana does hereby
29 direct the commissioner of administration to prioritize payment of legacy costs borne by the
30 LSU Health Sciences Center at Shreveport, the LSU Health Sciences Center at New Orleans,
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SLS 16RS-4024 ORIGINAL
1 and the LSU Health Care Services Division associated with the privatization of state
2 hospitals.
3 BE IT FURTHER RESOLVED that the commissioner of administration shall
4 develop a plan for permanent funding of public hospital legacy costs, and that the plan shall
5 entail a proposal for the private partners that operate state hospitals to bear such costs.
6 BE IT FURTHER RESOLVED that no later than thirty days prior to the convening
7 of the 2017 Regular Session of the Legislature, the commissioner of administration shall
8 submit a written report addressing the prioritization of payment of public hospital legacy
9 costs and the plan for permanent funding of such costs called for in this Resolution to the
10 Senate Committee on Finance, the House Committee on Appropriations, the Senate
11 Retirement Committee, the House Retirement Committee, the Senate Committee on Health
12 and Welfare, and the House Committee on Health and Welfare.
13 BE IT FURTHER RESOLVED that a copy of this Resolution be transmitted to the
14 commissioner of administration, the chancellor of the Louisiana State University Health
15 Sciences Center at New Orleans, and the chancellor of the Louisiana State University Health
16 Sciences Center at Shreveport.
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Jerry J. Guillot.
DIGEST
SCR 143 Original 2016 Regular Session Peacock
Directs the commissioner of administration to prioritize payment of legacy costs borne by
the LSU Health Sciences Center at Shreveport, the LSU Health Sciences Center at New
Orleans, and the LSU Health Care Services Division associated with the privatization of
state hospitals.
Requires the commissioner of administration develop a plan for permanent funding of public
hospital legacy costs, and that the plan shall entail a proposal for the private partners that
operate state hospitals to bear such costs.
Requires that no later than 30 days prior to the 2017 R.S., the commissioner of
administration submit a written report addressing the prioritization of payment of public
hospital legacy costs and the plan for permanent funding of such costs called for in this
Resolution to the Senate Committee on Finance, the House Committee on Appropriations,
the Senate and House retirement committees, and the Senate and House committees on
health and welfare.
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