Louisiana State University on Friday sued the private manager of its Shreveport and Monroe hospitals, alleging that the operator breached its contract and failed to live up to promises to keep the hospitals as academic centers.
LSU filed the lawsuit against the Biomedical Research Foundation of Northwest Louisiana, or BRF. LSU is seeking to oust the operator with the suit.
The suit comes only two years after hospital operations were turned over to the research foundation as part of Gov. Bobby Jindal's effort to privatize the state's charity hospital system.
In the suit, the university alleges that BRF's actions have been "antagonistic" to LSU and the state while also undermining the reputations of the hospitals.
The university had notified BRF on Thursday that it considered the hospital manager in breach of contract and demanded it withdraw as hospital operator. In response, BRF leaders vowed to sue.
The suit was filed in state district court in Baton Rouge.
BRF officials could not be reached immediately for comment.
LSU charged that BRF has "never given anything but lip-service to the education and training components" at the hospitals.
The suit also charged that BRF has focused its efforts on turning the hospitals into private facilities, which LSU says was never the intent of the contract they signed.
LSU System President F. King Alexander in a July letter outlined 11 pages of complaints about hospital management. He said BRF had not established a sustainable financial model for the hospitals, had damaged the LSU Shreveport medical school's reputation and threatened the stability of both the medical school and the hospitals.
Negotiations to resolve the complaints didn't end the dispute.
Foundation leaders, who run the hospitals as University Health, have denied any mismanagement and say they have followed the contract's terms. They've said LSU has thwarted efforts to ease the transition and remedy concerns.
BRF took control of the two north Louisiana hospitals in October 2013 through a no-bid contract, part of Jindal's push to privatize most of the university-run public hospital system that cares for the uninsured and provides much of the state's medical student training.
Privatization of the hospitals in Shreveport and Monroe was in contrast to the approach the Jindal administration took in south Louisiana, where LSU's facilities are being overseen by companies that run other private hospitals in the area.
Created in 1986 to boost regional economic development, BRF had more limited resources and no background in hospital management. It had never previously run a patient care facility. The research foundation's president and CEO was a Jindal campaign donor and, at the time the deal was struck, one of Jindal's appointees to the LSU Board of Supervisors.