Healthcare providers last week resolved two of the disputes that resulted from Hurricane Katrina in 2005.
$475 million for Charity Hospital; Pendleton settles
A debate over how much should be paid by the federal government to replace the city’s Charity Hospital was ended by the U.S. Civilian Board of Contract Appeals. The appeals board directed the Federal Emergency Management Agency to award the state of Louisiana nearly $475 million in public-assistance funds to replace the storm-damaged hospital, Gov. Bobby Jindal’s office said. The awarded amount is a majority of the $492 million that the state had requested for damages to the hospital.
“Several months ago we brokered an historic agreement between LSU and Tulane that set the stage for a new world-class academic medical center that will compete on the national stage,” said Alan Levine, secretary of the Louisiana Health and Hospitals Department, in a written statement. The ruling “brings us one large step closer to that reality,” Levine said.
Meanwhile, Pendleton Memorial Methodist Hospital in New Orleans settled a potentially precedent-setting lawsuit brought by the family of a 73-old-woman who died when the facility’s backup power failed in the aftermath of Katrina. The terms of the agreement are confidential, according to the lawyer representing for-profit Universal Health Services, the owner of Pendleton. The settlement was reached during the third week of the trial, which was widely watched because a verdict against the hospital was seen as potentially expanding the liability of healthcare organizations for emergency planning and performance (Jan. 25, p. 12). The case had already set precedent in Louisiana when the Louisiana Supreme Court ruled in 2007 that the lawsuit could allege general negligence against the hospital, thereby unleashing the potential damages from the state’s caps on medical malpractice awards.
Several other Hurricane Katrina-related lawsuits against hospitals remain in the pipeline, according to UHS’ lawyer, David Bowling. The city of New Orleans intends to buy Pendleton from UHS.
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