House Appropriations hears budget for LSU Health Care Services; Lolli Kemp accounts for most operating dollars

BATON ROUGE, La. — The House Appropriations Committee reviewed the Louisiana State University Health Care Services Division budget for fiscal 2026 on Tuesday, hearing that the division is asking for $73.6 million and that a large share goes to one rural hospital.

Julie McGee, a budget analyst with the House Fiscal Division, told the committee HCSD’s FY26 request totals $73,600,000 and that roughly 34% of the request is state general fund, with self-generated revenue and fees making up about a third. She said legacy costs tied to formerly privatized hospitals remain a significant state burden.

“The fiscal year 26 budget in House Bill 1 for HCSD is 73,600,000,” McGee told the committee. “You’ll see that 34% of the budget is state general funds largely associated with the legacy cost of the privatized hospitals.”

Nut graf: The committee’s questions focused on how much of HCSD’s request actually supports Lolli Kemp Hospital, a 24‑bed rural acute facility in Independence, and on workforce issues at the hospital and HCSD central administration. Lawmakers also sought clearer detail on legacy costs such as retiree group insurance and on the hospital’s payer mix.

The HCSD presentation said about $55 million of the $73.6 million would be used to operate Lolli Kemp. Lisa Bruhl, identified in the record as CEO of Lolli Kemp, told the committee the hospital carries a heavy outpatient caseload — roughly 91,000 outpatient encounters a year — and that turnover spiked after the COVID pandemic but has since moderated.

“We have right around 100,000 outpatient encounters each year,” Bruhl said. “We do focus quite a bit on outpatient and emergency department as well.”

Committee members pressed on the division’s vacancy and turnover numbers. Bruhl told lawmakers Lolli Kemp was advertising 11 vacant positions at the time of the hearing. McGee also reviewed a HCSD slide that projected $14 million in legacy retiree group insurance costs for FY26 — a number the Fiscal Division said has declined as legacy members age off the rolls.

Other details presented to the committee included: - HCSD’s five‑year spending history showed near‑flat growth, averaging 1.9% annually from FY20–24. - Funding sources for FY26: reported state general fund of $25.1 million, interagency transfers of $19.0 million (including LDH Medicaid reimbursements and Department of Corrections prisoner care), self‑generated revenue of $24.1 million, and federal funds of $5.4 million. - Expenditure profile: salaries and related benefits were budgeted at about 43% of HCSD expenditures and “other charges” at about 30% (other charges include retiree benefits, outside medical services and risk management premiums).

Committee members asked HCSD to provide a more granular, hospital‑level breakdown showing operating costs specific to Lolli Kemp (inpatient, outpatient, ED, and ancillary services) to better understand the roughly $55 million figure. Representative Amadei pointed out a simple per‑bed division suggested a very high per‑bed cost and asked for patient encounter detail to explain the budget.

In response, Bruhl and staff emphasized Lolli Kemp’s outpatient volume and said legacy administrative costs for the former hospitals — including retiree insurance and record management — drive much of the state general fund share HCSD carries.

Ending: Committee members requested follow‑up materials including (1) a hospital‑level cost and volume breakdown for Lolli Kemp, (2) a list of current HCSD vacancies and which posts the division considers mission‑critical, and (3) a clearer line‑item explanation of legacy cost components and recent trends in retiree rolls.

Speakers quoted or on the record: Julie McGee, House Fiscal Division; Lisa Bruhl, CEO, Lolli Kemp; Representative Amadei (questioning).

Topics: HCSD budget, Lolli Kemp operations, hospital payer mix, turnover.