Monday, January 11, 2010

Arbitration Concerning Compensation for Charity Hospital Nearing End

Charity Hospital was damaged by Hurricane Katrina and has been closed ever since.  The state of Louisiana is trying to get compensation from FEMA, but the federal government and the state government disagree about the appropriate compensation for the loss of the building ($150 million vs. $492 million). While that controversy continues, local residents have urged the state to fix and reopen Charity Hospital.

The state has never shown enthusiasm for such a plan, and on Aug. 28 the New Orleans Picayune reported that the Governor and the heads of LSU and Tulane Universities signed a power-sharing agreement for a new hospital. LSU will own the building, but the hospital will be governed by an 11-member nonprofit board:  4 members from LSU, 1 each from Tulane and Xavier, 1 rotating between Delgado Community College and Dillard University, and 4 independent directors. The state has promised to find money for the new building, even if the FEMA settlement is less than it thinks it should be.  

The state and the federal government have been engaged in third-party binding arbitration to resolve the dispute about how much money the state should receive for Charity Hospital.  The New Orleans Picayune reports today that a resolution is near.  The article details the arguments on both sides, mostly concerning what damage was caused by Katrina and how much was caused by neglect both before and after Katrina. The amount will have an impact on how quickly the building of the new hospital can begin.


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