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Delay In Federal Approval Trims Medicaid Savings

laptop next to a stethoscope and patient chart
The Florida Channel
Leon County Judge John Cooper on June 30, 2022, in a screen grab from The Florida Channel.

Nearly $100 million the state assumed would be saved by changing a policy about patient eligibility for Medicaid won’t come to fruition this year.

Tom Wallace, assistant deputy secretary for Medicaid finance and analytics at the Agency for Health Care Administration, told members of the Social Services Estimating Conference on Monday that Florida hasn’t gotten necessary approval from the federal government to move ahead with the change.

Instead of a July 1 start date, the change in policy will likely go into effect Jan. 1. A projected $98 million reduction was included in the new state budget, which took effect last month. Now, the Scott administration says the savings should be about half that amount.

But Wallace said the state isn’t deterred.

“We are confident that we will get federal approval, we just don’t know when that would be,” Wallace told the Social Services Estimating Conference, comprised of House and Senate staff members as well as staff from the governor’s office and the Legislature’s Office of Economic and Demographic Research.

Wallace said Florida Medicaid officials have been in correspondence with the federal government about how the policy change would be implemented.

Federal law requires states to cover the costs of medical bills incurred by people for up to three months before they apply for Medicaid. So long as people qualify for Medicaid and the services are covered, hospital, doctor and nursing-home bills that accrue during that period will be absorbed.

The longstanding policy, officially known as “retroactive eligibility,” protects poor people from unpaid medical bills that they cannot afford and helps ensure that hospitals and nursing homes are paid for services they offer to Medicaid-eligible people.

The policy change would eliminate the requirement that people have three months to apply for Medicaid and make them apply the same month as they need care.

AHCA projects that 39,000 people would be impacted by the change, which does not apply to pregnant women and children. That means the policy change would heavily impact seniors and people with disabilities, and the move has come under fire from critics, including Democrats.

Meanwhile, this is not the first time the Scott administration has revised the estimated savings from the change.

In a March 2017 letter to former U.S. Department of Health and Human Services Secretary Tom Price, AHCA Secretary Justin Senior said Florida could save $500 million if the policy were eliminated. Months later, the Scott administration floated the proposal to the Legislature for consideration during the 2018 session. Ultimately, the $98 million reduction was included in the state budget that began July 1.

While the full savings lawmakers anticipated won’t be realized, Wallace told budget conferees that overall costs for the Medicaid program this year should be nearly $732 million less than what was appropriated in the budget. Nearly $228 million of that surplus is general revenue. The lower cost is due in part to a continued dip in Medicaid enrollment.