BATON ROUGE, Louisiana — LSU sent a collection letter this week to the research foundation running its hospitals in Monroe and Shreveport, saying the foundation owes the university system $25.3 million and accusing it of using LSU like its "personal piggy bank."
The Biomedical Research Foundation of Northwest Louisiana, known as BRF, took control of the two hospitals in October 2013, as part of Gov. Bobby Jindal's push to privatize most of the university-run public hospital system. The foundation had never previously run a patient facility.
In a blistering, two-page letter obtained Thursday by The Associated Press, the university says the foundation, which is operating the two hospitals as University Health, hasn't assumed the financial obligations required under its contract, despite taking over hospital management 10 months ago.
"LSU has, without compensation, provided millions of dollars of physician, transition and other services to BRF and has also incurred and paid millions of dollars in actual out-of-pocket fees and expenses for obligations that were owed by BRF and/or were to be assumed by BRF," wrote Patrick Seiter, a contract lawyer for LSU.
The university system says the unpaid bill has created problems for its medical school in Shreveport. It demanded payment by Aug. 27.
The foundation "has effectively utilized LSU as BRF's personal piggy bank and placed significant financial burdens upon LSU and thereby negatively impacted the medical school's financial stability," Seiter wrote.
Stephen Skrivanos, chairman of the research foundation's board, disagreed with the amount owed, and he blamed LSU for making the privatization management transition more difficult than necessary.
"The net amount due to LSU would be closer to $18 (million) if we agreed to all of the amounts in the open contracts. We don't. We will work with LSU to mutually agree on the amounts due on the executed contracts and pay them promptly," Skrivanos wrote in an email responding to the LSU letter.
He described university claims that the foundation hasn't completed a list of ancillary agreements related to hospital operations as "simply laughable," saying university officials are trying to demand the hospital managers sign agreements that are not consistent with its business purposes.
"The facts in the demand letter are so one-sided as to strain credulity," Skrivanos wrote in his email.
He accused LSU of showing an "apparent disregard for the human lives" who rely on the north Louisiana hospitals for care and of improperly running the clinics affiliated with the hospitals when they were under university control.
"University Health has improved every measurable administrative aspect of health-care delivery in the last ten months, and there is little question that without our willingness to address this situation — when no other entity was willing to do so — the conditions we inherited from LSU would still exist," Skrivanos said.
The heated language in both letters was a striking difference from a year ago, when the privatization deal was struck. At the time, the Jindal administration and university leaders championed the contract as a way to improve health care for the poor and uninsured who rely on the hospitals for care and to bolster the medical training programs that use the facilities.
BRF's president is John George, a Jindal campaign contributor who was one of the Republican governor's appointees to the LSU Board of Supervisors at the time the deal was struck.