Tampa-Area Hospitals Face $151M Cut

Jan 29, 2015

Hillsborough County hospitals are scheduled to lose more than $151 million a year in funds for care of the uninsured beginning June 30, according to a report released Thursday.

Credit Tampa General Hospital

The scheduled changes to two revenue streams “represent a tremendous loss of federal funding to the county and pose a significant risk,” warns the report by the Community Justice Project, part of Florida Legal Services.

Statewide, the coming annual loss will be $2.1 billion, estimates co-author Charlotte Cassel.

“There is a huge cut looming,” she said.

This is the third in a series of reports by Cassel and Harmatz focusing on the effects of the pending funding cuts on individual counties. So far they have studied Miami-Dade and Brevard, with Orange County scheduled next.

The Tampa Bay area report strongly urges that Florida accept the federal funds provided through the Affordable Care Act for states that expand Medicaid expansion to people under the poverty level who are not covered now. That includes close to 1 million uninsured Floridians.

The expansion funds would more than offset the revenue that is going away, Cassel said. She estimated Hillsborough's share at $375 million.

The money that will soon disappear has been propping up “safety-net” hospitals and community clinics that treat a large share of the patients who can’t pay.

Tampa General Hospital will account for about half of the county’s coming loss, the report says,  because of its lead role in charity care. TGH is the top-level trauma center in the region and the teaching facility for University of South Florida’s Morsani College of Medicine.

Steve Short, Executive Vice President and Chief Financial Officer for Tampa General, says that the projected loss of more than $70 million annually will be more than the hospital can cover through cost-cutting. The current operating margin, Short said, is around $30-to-$35 million.

“It would be devastating,” Short said. “I’m not sure the hospital could exist.”

Other hospitals that would be walloped by the cuts include St. Joseph’s (more than $30 million) and H. Lee Moffitt Cancer Center ($25 million). In Pinellas County, All Children’s Hospital would be hurt worst, at $27 million, followed by Bayfront Medical Center, at $11 million.

Also losing revenue are a dozen health centers operated by such groups as Suncoast Community Health and Tampa Family Health.

Most of the loss that the Legal Services report forecasts comes from the anticipated end of a 10-year-old matching-funds program for Florida called the Low Income Pool, or LIP. There will also be a more gradual reduction in funds for the Medicaid Disproportionate Share Hospital Program, or DSH, which Congress created about 40 years ago to support hospitals that treat a high rate of Medicaid and uninsured patients.

A legal research fellow, Cassel worked on the Community Justice Project report with Senior Attorney Miriam Harmatz in the Miami office of Florida Legal Services, a non-profit advocacy group for low-income Floridians. It was co-sponsored by the League of Women Voters of Hillsborough.

The estimated loss for Miami-Dade  hospitals, from a report in December, is $600 million a year; Brevard’s, reported earlier this month, was $15 million.

Cassel said the team chose Hillsborough as one of the five counties that would get a dedicated in-depth report because of its nationally recognized program for the low-income uninsured, the Hillsborough County Health Care Plan.

Since the 1990s, the county’s half-cent sales tax for indigent care has been used to draw matching federal dollars for the LIP program.

The county’s plan currently covers about 12,000 residents, about one in five of those who fall into the “coverage gap” of uninsured people below the poverty level, the report said. Those in the gap don’t qualify to enroll in a federal Marketplace plan; the Affordable Care Act intended them to be covered by expanding Medicaid, the joint federal and state program for the indigent and disabled.

An estimated $51 billion in federal funds over 10 years was to cover most of the cost of that project in Florida. But in the past two Legislative sessions, Florida's House hasn't backed the idea.

The 2010 federal health law cut back on hospital funding for the uninsured on the assumption that less of it would be needed when most Americans are covered either by private insurance or a government-sponsored plan. Indeed, hospitals in states that have expanded Medicaid to reduce the number of uninsured have reported a rapid decline in unpaid bills.

Florida business groups are urging the 2015 Legislature to accept the federal funds and cover the uninsured  below the poverty level.  But new House Speaker Steve Crisafulli said Wednesday in St. Petersburg that he had no plans to take up the matter.

Health News Florida special correspondent Carol Gentry is part of WUSF in Tampa. Health News Florida receives support from the Corporation for Public Broadcasting.