LSU's network of charity hospitals and clinics will lose a quarter of its budget, with the Jindal administration choosing to levy the largest slice of Medicaid cuts on the facilities.
Health and Hospitals Secretary Bruce Greenstein said nearly $317 million of the $523 million in cuts announced Friday will fall on the public health care system run by LSU.
Hospital officials had previously warned that they couldn't make deep cuts without shuttering facilities.
Greenstein said the administration's plan doesn't call for closures, but asks LSU to make structural changes and create efficiencies.
The slashing is tied to a congressional reduction in Louisiana's federal Medicaid financing rate.
Other cuts will fall on hospitals that take care of Medicaid patients. A state-run mental hospital in Mandeville will be closed.