FRANKFORT — A University of Louisville administrator faced tough questioning Monday from state lawmakers delving into details of the school's plan to purchase financially ailing Jewish Hospital.
The financing package revealed last month includes the state backing the deal by loaning $50 million to UofL — half of which would be forgivable if certain conditions are met.
That funding will require legislative approval after Kentucky lawmakers convene in early January for their 2020 session. The financing for the deal received some initial pushback from lawmakers during a meeting of a Medicaid oversight legislative panel.
"We've got some serious issues and reservations about this," Sen. Stephen Meredith said.
Meredith, a Leitchfield Republican, said UofL's medical programs have strong support but added that "this is happening very quickly and we need more information, more dialogue."
UofL trustees last month approved the deal to have the school purchase Jewish Hospital in a transaction that university leaders said will benefit the region's health care and the school's medical training and research programs. Gov. Matt Bevin's administration played a key role in developing the financing plan, and the Republican-led legislature's top two leaders — House Speaker David Osborne and Senate President Robert Stivers — have expressed support.
UofL Health CEO Tom Miller told the legislative panel Monday that "the future of health care looks secure in Louisville" as a result of the planned acquisition.
Miller faced tough questions from lawmakers seeking more details about the financing package and how UofL will be able to absorb the financially ailing Jewish Hospital in Louisville.
Senate Minority Floor Leader Morgan McGarvey told Miller he was "unconvinced" so far that the deal is the right approach to ensure that UofL has a "first-rate" teaching hospital.
McGarvey, a Louisville Democrat, also questioned whether the hospital acquisition qualifies for terms of the state loan being arranged by Bevin's administration.
"This loan obliterates every single criteria" under terms of the loan program — including the maximum limit loaned and the requirement that jobs be created, he said.
Meredith called it "precedent setting" to use a state loan to support a hospital.
He noted that the state didn't step forward with a financial package to rescue an eastern Kentucky hospital that filed for bankruptcy late last year.
"Are we picking winners and losers?" Meredith asked.
Republican Sen. Ralph Alvarado called it a "tough situation," but with the Louisville hospital community's inability to meet medical needs if Jewish Hospital closed, he added: "Clearly, I think there's a need." Alvarado is Bevin's running mate in this year's election.
Under the deal, University Medical Center Inc., owned by UofL, will acquire Jewish Hospital and the other Louisville-area KentuckyOne Health properties and integrate them into the UofL system.
Besides Jewish Hospital, the purchase includes Frazier Rehab Institute; Sts. Mary & Elizabeth Hospital; Our Lady of Peace hospital; Jewish Hospital Shelbyville; Jewish Medical Centers East, Northeast, South and Southwest; and physician groups affiliated with KentuckyOne.
The sale is expected to close Nov. 1, officials said.
Half of the proposed $50 million loan from the state would be forgiven if the university meets conditions for job retention and medical service to underserved areas of the community and state.