'LIP' Money Falls Short Of Initial Estimates
At the height of a budget showdown earlier this year, Gov. Rick Scott boasted that his friendship with President Donald Trump's administration would result in Florida getting $1.5 billion to help the state's hospitals.
But months later, the final amount will be considerably smaller, a top state Medicaid official said Wednesday. Instead the state will have about $790.4 million in supplemental Medicaid funds to spend this year.
Beth Kidder, a deputy secretary at the state Agency for Health Care Administration, told the Senate Health and Human Services Appropriations Subcommittee that the agency has $303 million in funding commitments from counties to help fund the Low Income Pool. The money will be used to draw down $487 million in federal Medicaid dollars bringing the total available to just more than $790 million for the supplemental program widely known as LIP.
“The $1.5 billion is not $1.5 billion,” Senate Health and Human Services Appropriations Chairwoman Anitere Flores, R-Miami, said.
Kidder told the panel that the size of the Low Income Pool has always been contingent on the receipt of matching local dollars to fund it. While the state in the past has been able to fully fund the program, the federal government has changed its expectations on how money can be spent. For instance, money can no longer be used to help offset losses hospitals incur while treating Medicaid patients. Under the new rules, only charity care can be considered for reimbursement.
The restrictions, Kidder said have made it “onerous and difficult for funders” to agree to provide the required local matching dollars. She also noted that the state didn't get final approval of what is known as a Medicaid 1115 waiver and accompanying special terms and conditions until August, after local governments had already prepared budgets. The Medicaid 1115 waiver gives the state the authority to operate its mandatory Medicaid managed-care program as well as the LIP program.
Kidder tried to remain optimistic, though. She told the committee that the $790.4 million in LIP funds for fiscal year 2017-2018 is more than the $590 million Florida had for the program last year. Additionally, she reminded lawmakers that the Trump administration agreed to keep available a $1.5 billion LIP program for the next five years.
“It's out there, it's a target,” she says of the $1.5 billion annual commitment.
Under the approved waiver, three groups of providers can tap into LIP funds: hospitals, medical school faculty and federally qualified health centers. All of them must agree to certain requirements to get the money. For instance, hospitals must agree to sign contracts with at least half of the standard Medicaid health plans that operate in their regions.
Meanwhile, the Agency for Health Care Administration posted details on how it plans to distribute the $790 million in LIP funding. More than $654 million is being directed to 204 hospitals, $85 million is being directed to eight medical faculty teaching practices and another $50 million is allocated to federally qualified health centers.
The federally qualified health centers, though, say they have problems with a provision in the Medicaid 1115 waiver's special terms and conditions that requires all reimbursements to the clinics to be made by managed-care organizations, rather than the state paying bills directly.
Kidder told lawmakers that the agency has met with the federally qualified health centers to discuss the concerns, including a meeting Wednesday.
Florida Association of Community Health Centers President Andy Behrman told senators that the Wednesday meeting with state officials was a “good move forward” and that there may be a way to solve some of his members' concerns.
He said the clinics don't want to walk away from $50 million but that they need to be protected.
The state has asked counties contributing matching dollars to the LIP program to send signed letters of agreement to the state by Nov. 15 and to send the funds to the state the following month.
After the state receives the funding, Kidder said, it will submit a proposed budget amendment to legislative leaders for approval. The budget amendment will include a 2017-2018 LIP distribution model that shows the government entities that contributed the funds as well as the funding distribution by provider.
The amendment will be approved within 14 days of submission unless the chair and vice chair of the Joint Legislative Budget Commission or the Senate president and speaker of the House of Representatives oppose the amendment in writing.