Louisiana Gov. Bobby Jindal says he will appeal federal officials' rejection of financing plans for privatization deals involving six state-owned hospitals that care for the state's poor and uninsured.
In a statement, the Republican governor said the U.S. Centers for Medicare and Medicaid Services "has no legal basis for this decision."
The federal agency told the Jindal administration Friday that the deals don't meet federal guidelines governing how Medicaid dollars can be spent.
The decision could create massive upheaval in the state's budget.
Jindal didn't wait for federal approval before he shifted the hospital management, so the hospitals are now operating under financing plans that have been rejected after being used to balance Louisiana's budget.
Jindal, however, said there would be no short-term impact on the budget, because the state will appeal.