March 8, 2018

Medicaid Hospital Reimbursement Drives the Legislature into Overtime

This post was last updated on September 29, 2021. As new policies are announced, FPI will update this page.

As Florida’s response to COVID-19 takes front and center, concern grows for low-income families who struggle to take precautions against the spread of the virus. Although Congress has passed the Families First Coronavirus Response Act to address, at least in part,  the public health crisis and economic fallout from COVID-19, many barriers continue to keep struggling families from accessing the assistance they need during the pandemic. As Florida initiates policies implementing the Act and addressing other barriers to the safety net, FPI will update this form. When available, hyperlinks are provided to agency documents or statements that provide greater detail  about the new policy.

On March 22, 2020, FPI and 44 other organizations sent a letter to Governor DeSantis, leadership in the Legislature and agency heads to urge action on 47 specific policy changes to reduce unnecessary barriers for Florida’s safety net programs in response to the COVID-19 pandemic. See the letter here.

Session will not be ending on time. The chambers have purportedly reached a budget agreement, meaning that what was being reported as the final stumbling block, Medicaid hospital reimbursement, has been resolved. Unfortunately, this resolution comes too late to pass a budget and complete the session by March 9.

The Florida House and Senate took very different approaches to the hospital reimbursement issue; however, the House version has prevailed and will become part of the final budget.

The Florida House proposal would continue the current model, providing $318 million in enhanced Medicaid payments to 28 hospitals that serve large numbers of Medicaid patients. The Senate proposed to eliminate these targeted enhanced payments and instead fold the dollars into base rates that flow to all hospitals serving Medicaid patients.

Hospitals are not on the same page with these proposals. Under the Senate model, public, teaching and children’s hospitals comprising the Safety Net Hospital Alliance would have millions to lose. Miami’s Jackson Health System alone would take a $59 million cut. In contrast, for-profit chains, like Hospital Corporation of America (HCA) and Tenet are slated to gain $44 million.

Rural hospitals endorsed the Senate proposal. It included an extra $50 million over current year funding, which could have helped make up for the more than $11 million cut these hospitals are absorbing this fiscal year.

One point of agreement is that Florida Medicaid reimbursement rates are too low. The 2015 Navigant study noted, “Florida’s Medicaid program is not funded to the level that programs of similar size across the nation are funded, resulting in below average payments to providers throughout the state.”

Nothing has happened to change this fact. Indeed, since that study, funding has only decreased, with hospitals taking a $521 million cut just last session.

Yet, the Legislature continues to resist a proven way to fundamentally change this picture: Medicaid expansion. Expansion has been shown to improve hospital finances and reduce closures, particularly in rural areas and those with large numbers of uninsured adults.

In the meantime, the 2018 Legislature will no doubt come up with another short-term band aid and keep kicking the can down the road. Surely, the extra taxpayer dollars spent on legislative overtime to fix this problem could be better invested in long term solutions to truly improve access to health care for all Floridians.

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