Budget raid takes $140M from health, insurance oversight

Jan 15, 2009

By Christine Jordan Sexton
1/15/2009 © Florida Health News

Florida lawmakers have siphoned off millions of dollars paid by health care professionals, the insurance industry and the business community in order to help wipe out a $2.4-billion budget deficit.

The $2.6-billion budget reduction that the Florida Legislature approved on Wednesday calls for a $35-million transfer from the Medical Quality Assurance Trust Fund into the main state account that pays for education, prisons and Medicaid.  (See MQA trust fund balances, by profession, as of June 30.)

The compromise also includes a $35-million transfer from the Workers' Compensation Administrative Trust Fund and $70 million from the Insurance Regulatory Trust Fund. (See Division of Financial Services' accounts for these trust funds).

State officials insist the raid won’t force the state to hike licensing fees or cut back on regulation.  This is the first time that licensing fees by health care professionals have been used like a tax to pay for other functions of state government.

“Licensure fees …are not intended to offset the deficit in the general revenue fund,” said Jeff Scott, general counsel for the Florida Medical Association. 

While in the past the thought of using this money for other purposes was taboo, lawmakers faced no opposition from lobbyists whose clients pay the fees.

“We are not thrilled about it, but we don’t want to see Floridians suffer,’’ said Anna Smalls, legislative counsel to the Florida Nurses Association.

The MQA trust fund pays for licensing of doctors, nurses, pharmacists and other health professionals, as well as investigations into complaints and prosecution of cases against those accused of violating the law. 

The workers’ compensation fund is used to help fund the state's comp system, including investigation of fraud and judges who hold hearings on claims.

The insurance regulatory trust fund covers the costs for the Office of Insurance Regulation, which examines filings from all types of insurance companies to ensure their solvency and protect consumers.

The Florida Department of Health first recommended tapping into the medical trust fund last October, although the department suggested taking $30 million, about $5 million less than what lawmakers took.

Cassandra Slocum, senior health budget analyst in Medical Quality Assurance, said the raid won’t affect the department’s ability to license and regulate health care providers. The Department of Health has about a $15-million surplus left in the medical trust fund account even after the transfer, Slocum said. While it’s possible that the Legislature could move to use the rest of the trust fund dollars during the regular session in March, she suggested that “it’s very unlikely.”

A number of separate licensing fees feed into the overall medical quality assurance trust fund. Some of the individual programs, such as the one that doctors pay into, had cash surpluses. For example, at the end of June 30 – the end of the state fiscal year – the physician fund had a $9.2 million surplus. Nurses’ fund had a $7.89 million surplus.

Some accounts, such as that for emergency medical technicians, run a deficit. The shortfall in the EMT account at the end of June was $2.3 million. 

-- Contact Christine Jordan Sexton.