BATON ROUGE, La. (AP) - Federal officials have rejected financing plans by Louisiana Gov. Bobby Jindal's administration for privatization deals involving six state-run hospitals.
The U.S. Centers for Medicare and Medicaid Services notified the state health department Friday of its refusal to sign off on the deals. The agency said they don't meet federal guidelines governing how Medicaid dollars can be spent.
The decision was a significant blow to the Jindal administration and could create massive upheaval in the state's budget because the deals rely on hundreds of millions of dollars in federal funding.
Jindal didn't wait for federal approval before he shifted the hospital management, so the hospitals are now operating under financing plans that have been rejected.
The rejections involved plans for LSU-run hospitals in New Orleans, Lafayette, Houma, Lake Charles, Shreveport and Monroe.
(Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)