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Jefferson Parish Council to consider disqualifying HCA from hospital lease

By Ben Myers | The Times-Picayune

January 30, 2014

Jefferson Parish Councilman Ricky Templet said Thursday he will seek to disqualify Hospital Corp. of America from leasing West Jefferson Medical Center and East Jefferson General Hospital. He said it’s justified under the parish’s anti-corruption ordinances, referring to the company’s guilty plea 14 years ago to Medicare fraud and other charges.

Templet’s proposal, which the council will consider next week, makes for the latest development in the high-stakes competition to take over operation of Jefferson’s two public hospitals for the next 30 years. The hospitals’ governing boards and the council itself have been split for five months between HCA and Louisiana Children’s Medical Center for a deal worth at least $406 million.

Jefferson’s ordinances let the council disqualify would-be contractors that have been convicted for an offense “indicating a lack of business integrity or business honesty.” The council also may immediately terminate existing agreements when contractors are found guilty of “public corruption or breach of any laws pertaining to governmental ethics.”

Templet said he is concerned about a number of allegations of wrongdoing by the Nashville, Tenn.-based company, but the preamble to his resolution notes only that “HCA had facilities under its control plead guilty to criminal conduct.” That refers to two HCA subsidiaries that admitted committing Medicare fraud, paying kickbacks and other crimes in 2000.

HCA did not immediately respond to a request for comment. In a statement last week, HCA officials noted the “issue has been resolved for more than a decade.”

“We have addressed it and all issues transparently,” the statement says.

Last week Templet sought parish attorney Deborah Foshee’s opinion on whether the convictions are grounds for disqualification. Councilman Ben Zahn requested a similar opinion concerning Children’s, citing a patient referral kickback scheme involving Touro Infirmay five years before Children’s acquired it. That case resulted in criminal charges for a doctor but not the hospital.

Foshee, jointly responding to Templet and Zahn, affirmed that the council may apply the anti-corruption ordinances to exclude any potential hospital lessee. But she did not opine directly on whether HCA or Children’s should be axed.

“I must state the obvious: All past performance of any suitor is appropriate for consideration when making a vendor selection,” Foshee wrote.

Ochsner Health System also is a finalist for the hospitals lease but has not garnered much support from either the hospital governing boards or council members. West Jefferson’s board endorsed Children’s, and East Jefferson’s wants HCA.

The selection process began more than 18 months ago but dissolved into “total disarray,” according to the Bureau of Governmental Research, after the hospital boards failed in August to agree on a recommendation. Three council members – Templet, Chris Roberts and Elton Lagasse -support Children’s. Allowing the hospitals to lease to separate suitors is another option, one that Zahn, Cynthia Lee-Sheng and Paul Johnston have supported.

The seventh council member, Mark Spears Jr., has not stated a preference. He prevailed in a 4-3 vote Jan. 15 to defer the selection while parish officials seek an outside auditor to evaluate the competitors’ proposals.

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