2016 Regular Session ENROLLED
SENATE CONCURRENT RESOL UTION NO. 143
BY SENATORS PEACOCK AND TARVER AND REPRESENTATIVES GLOVER,
JENKINS, LEGER AND NORTON
A CONCURRENT RESOL UTION
To direct 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; and to develop and report to the legislature
concerning a plan for permanent funding of such costs.
WHEREAS, a sudden reduction in federal funding for the Louisiana Medicaid
program was included in a sweeping transportation bill passed by the United States Congress
and signed into law on July 6, 2012, and resulted in a net decrease of over eight hundred fifty
million dollars in the Medicaid budget of this state; and
WHEREAS, pursuant to this dramatic cut to Medicaid funding, the Department of
Health and Hospitals (DHH) addressed the shortfall by eliminating funding for state
hospitals operated by the Board of Supervisors of Louisiana State University and Agriculture
and Mechanical College (LSU); and
WHEREAS, DHH developed public-private partnerships for the delivery of health
services at LSU hospital facilities operated by private healthcare enterprises, with the terms
and conditions for such service delivery set forth in cooperative endeavor agreements among
the state, LSU, and private providers; and
WHEREAS, although the cooperative endeavor agreements address the delivery of
health services as well as $167 million in lease payments to the state for the use of the public
hospital buildings and equipment, they did not address the liability of residual hospital
expenses, or "hospital legacy costs"; and
WHEREAS, hospital legacy costs include Office of Risk Management costs
associated with the hospitals for five years after the transfer of the property, termination pay,
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unemployment pay, retiree health insurance for the life of the retiree, retiree life insurance,
medical records for ten years, and property maintenance until the property is repurposed; and
WHEREAS, for fiscal years 2014 and 2015, funds were not appropriated to LSU to
cover the hospital legacy costs leading to $53 million in funding stripped from the
Shreveport medical school operating budget and $94 million in funding from the Health
Care Services Division; and
WHEREAS, for the current fiscal year 2016, the legislature appropriated sufficient
funding to cover the hospital legacy liabilities; and
WHEREAS, for the upcoming fiscal year 2017, the executive budget included
funding to cover most of the hospital legacy costs for the Health Sciences Centers in
Shreveport and New Orleans and the Health Care Services Division; and
WHEREAS, although the hospital legacy costs have decreased by almost half since
fiscal year 2014, legacy costs will remain for the foreseeable future to cover the health
insurance of all former LSU hospital employees, as well as maintaining hospital property
until said property may be repurposed; and
WHEREAS, while the privatization of the hospitals has allowed the LSU Health
Sciences Centers in Shreveport and New Orleans to refocus on their mission of medical
education, it has left the LSU medical schools vulnerable to an ongoing residual hospital
liability of $50 million, and a state responsibility to its retirees, without a recurring revenue
source; and
WHEREAS, if these hospital legacy costs are not appropriated in the budget on an
annual basis, it would be to the detriment of medical education for the state.
THEREFORE, BE IT RESOLVED that the Legislature of Louisiana does hereby
direct 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.
BE IT FURTHER RESOLVED that the commissioner of administration shall
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.
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BE IT FURTHER RESOLVED that no later than thirty days prior to the convening
of the 2017 Regular Session of the Legislature, the commissioner of administration shall
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
Retirement Committee, the House Retirement Committee, the Senate Committee on Health
and Welfare, and the House Committee on Health and Welfare.
BE IT FURTHER RESOLVED that a copy of this Resolution be transmitted to the
commissioner of administration, the chancellor of the Louisiana State University Health
Sciences Center at New Orleans, and the chancellor of the Louisiana State University Health
Sciences Center at Shreveport.
PRESIDENT OF THE SENATE
SPEAKER OF THE HOUSE OF REPRESENTATIVES
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