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HCA Seeks Higher Medicaid Payments To Replace LIP

Leon County Judge John Cooper on June 30, 2022, in a screen grab from The Florida Channel.
The Florida Channel
Leon County Judge John Cooper on June 30, 2022, in a screen grab from The Florida Channel.

Saying the Low Income Pool is "not a long-term solution and often yields inequitable results," the hospital company HCA has sent a letter to Gov. Rick Scott calling for an overhaul of the way Florida pays for care of low-income patients. 

HCA, which has 46 hospitals in the state, recommended increasing base Medicaid payment rates for hospitals --- and offered the possibility of increasing a hospital-provider tax to help finance the changes. Money collected through such a tax hike could be used to draw down additional federal Medicaid funding.

The letter, dated Friday, came as a commission appointed by Scott prepares to meet Wednesday to begin work on health care funding issues. It also came amid uncertainty about the $2.2 billion Low Income Pool program, which sends additional money to hospitals and other providers that care for poor and uninsured patients.

The program, known as LIP, is scheduled to expire June 30 unless state and federal officials can reach agreement on an extension. In the letter, HCA said it receives a disproportionately small amount of money through the Low Income Pool for the uncompensated care it provides.

It said in the letter that money from increased Medicaid rates would be provided to hospitals through what is known in the industry as the "Diagnosis Related Group" system. Florida's Medicaid program moved to that system, which involves a complicated formula, in 2013.

Broadly, the idea of the system is to classify patients based on factors such as their diagnoses or types of treatments. Those classifications are used to calculate payment amounts designed to more closely reflect the costs of treating patients.

In the letter to Scott, HCA said increasing the base Medicaid rates and hiking the hospital tax would "provide an equitable increase in Medicaid funding that will serve to offset much of the loss of LIP funds for charity and uninsured patients."