Lawmakers Strike Deal On Hospital Funding

June 13, 2015

Lawmakers struck a deal Friday on how to spend about $2 billion in hospital funding in the budget year that begins July 1, clearing a key sticking point in talks about a state spending plan and potentially clearing the way to end a special session next week as scheduled.

The agreement on divvying up the mixture of local, state and federal dollars among dozens of hospitals across Florida caps a debate that helped derail the regular spring session and forced lawmakers to return to Tallahassee this month. House and Senate negotiators are racing the clock to try to finish their work in time for a vote on the budget by the scheduled June 20 conclusion of the special session, 10 days before the state must have a spending plan to avoid a government shutdown.

Lawmakers had already decided how to buffer hospitals from the drop in funding in the Low Income Pool program, which provides additional money to hospitals and other health-care providers that care for large numbers of low-income patients. The federal government is reducing the so-called “LIP” program from $2.2 billion in the current budget year, which ends June 30, to $1 billion next year. The legislative plan will use state money to draw down other federal funds to boost payments to all hospitals for Medicaid services in an effort to offset that drop.

But until Friday, there was no agreement on the formula that would be used to distribute the money through the state’s health-care system.

“It’s important … that we provided some stability in the health-care system for hospitals to understand that, yes, Low Income Pool is going to change, but we’re going to make a financial commitment on the state standpoint to help in that transition, and that’s what we did,” said Senate President Andy Gardiner, an Orlando Republican and health-care executive. “Once that was done, I think that’s a huge step forward.”

A spokesman for Gov. Rick Scott, who has voiced opposition to using state tax dollars to fill in the loss of LIP, said the governor’s office was still reviewing the proposal.

With the budget deadline looming, there are still areas of disagreement between the two chambers that will need to be hammered out, including some education policy provisions that the Senate wants to place into a budget-related bill and how to prune an expansive list of water projects into the amount set aside for that purpose. Hours after the agreement on LIP was announced, Gardiner and House Speaker Steve Crisafulli, R-Merritt Island, said the chambers’ budget chiefs would continue negotiations through the weekend.

Crisafulli and Gardiner had been scheduled to start direct negotiations on the spending plan after Friday. Instead, House Appropriations Chairman Richard Corcoran, R-Land O’ Lakes, and Senate Appropriations Chairman Tom Lee, R-Brandon, will continue their talks.

“We look forward to using this last week of the special session to finalize a balanced budget and deliver broad-based tax reform legislation,” Crisafulli and Gardiner said in a joint statement. “We look forward to an on-time finish.”

As for the LIP model itself, Senate Health and Human Services Appropriations Chairman Rene Garcia, R-Hialeah, said lawmakers tried as much as possible to lessen the impact of the changes in funding.

“Obviously, there are going to be winners and losers,” he said. “We tried to make sure that we smoothed out and helped those hospitals that were losing more money because of the formula that we came up with. It’s not a perfect formula, but it’s the fairest formula we could come up with to make sure that we ensure that these hospitals, especially the safety nets, were taken care of.”

Still, some hospitals lost money. Jackson Memorial Hospital in Miami would see the payments it receives from the state — after contributions the hospital makes to the formula — tumble from $270.5 million under the old model to $263.8 million under the new formula. Funding for Bay Medical Center, in Bay County, would slide from $12.8 million to almost $9.9 million.

There were winners as well. Miami Children’s Hospital, for example, would see its share of the funds increase from almost $51.9 million in the current year to almost $57.9 million next year.

While many were still crunching the numbers Friday, hospital executives applauded parts of the deal, such as $100 million to increase medical residencies in the state.

“This is a big step toward ensuring that Florida has the physicians needed to meet the health care demands of our growing, aging and increasingly diverse population,” said Carlos Migoya, president and CEO of Jackson Health System and chairman of the board of the Safety Net Hospital Alliance of Florida. “This will go a long way toward reducing the specialist shortage that everyone agrees must be addressed now.”

Lawmakers also set aside $50 million to fund programs that generally receive help from LIP but otherwise might have been left out of the formula.

Challenges remain in the future. The federal government has told state officials that they can expect to see LIP fall to about $600 million next year.

“And we know that next year we’re going to be working with $400 million less, so we took a proactive approach to make sure that we lessened the blow as it relates to the following year, the outlying years,” Garcia said.

by Brandon Larrabee, The News Service of Florida

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Written by William Reynolds · Filed Under News