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Feds Seek To Recoup $412 Million In Medicaid Money From Miami Hospital

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

Miami’s Jackson Memorial Hospital got hundreds of millions in Medicaid dollars that it shouldn’t have received between 2010 and 2014, auditors say, and now the federal government wants the money back. 

A new audit issued by the U.S. Department of Health and Human Services Office of Inspector General contends the public hospital erroneously claimed $686 million in Medicaid costs, of which $412 million was paid by the federal government.

Auditors recommended that the state advise Jackson Memorial “to establish procedures” to return the federal share of the money.

The majority of the erroneous payments --- $347.5 million --- stem from claiming ineligible medical expenses for such things as providing non-emergency care to patients who did not legally reside in the United States and delivering outpatient care to prisoners. The audit also found that the hospital did not offset Medicare and commercial insurance payments against costs for certain patients.

The audit also said the hospital erroneously claimed $36 million in non-medical costs that weren’t allowed. Chief among them was a program called “Jackson International,” which helps international patients find providers who can treat them.

Jackson Memorial did not immediately respond to a request for comment Wednesday from The News Service of Florida. But the audit, issued last week, noted that the facility “disagreed with most of our findings.”

Mary Mayhew, secretary of the state Agency for Health Care Administration, issued a statement Wednesday that said the agency “adamantly” disagrees with the audit conclusions. The agency oversees most of the Medicaid program in Florida.

“The state’s primary and overarching concern is that the OIG has failed to properly review and interpret available data and relied on a fundamentally flawed methodology in calculating overpayments. Given the breadth and scope of this audit, there is no room for error and omissions when the clawback of federal funding would result in devastating consequences to one of the largest safety net hospitals in our state,” Mayhew said in the statement. “Jackson Memorial plays a critical role in meeting comprehensive healthcare needs for hundreds of thousands of Floridians including uninsured and Medicaid patients.”

The audit involved a program known as the Low Income Pool, which is designed to funnel extra money to health-care providers that serve large numbers of low-income and uninsured patients. The so-called LIP dollars can be spent on uncompensated costs of medical services.

From state fiscal years 2010 through 2014, hospitals received a total of $5.1 billion in LIP funds. Jackson Memorial received $1.8 billion of that total, or about 35 percent of the overall amount. That’s 3.6 times more than any other facility that received LIP funds during that time.

Jackson Memorial is the largest teaching hospital in Florida and the only public hospital in Miami-Dade County. The 1,493-bed facility gets the largest share of the money because the health system helps fund the Low Income Pool.

The state has not traditionally contributed any general revenue to the program. Instead, funding comes from counties and hospital taxing districts that send money to the state. Those local funds then are used to draw down matching federal dollars.

The newly released audit differs slightly from a draft audit issued earlier this year. The draft alleged that Florida claimed $728 million erroneously, of which $436 million was paid by the federal government.

The LIP program is closely watched in Tallahassee, as it has been an important source of funding for Jackson and other hospitals across the state.

Republicans have held out supplemental programs such as LIP as a way to help health-care providers offset the largest costs of uncompensated care. But former President Barack Obama’s administration maintained that using Medicaid funds to offer health insurance was a better use of the money.

After Florida refused to expand Medicaid eligibility in 2015, the Obama administration announced it would eliminate the state’s LIP program, which was funded at the time at a high of $2.1 billion.

Then-Gov. Rick Scott, however, convinced the Trump administration in 2017 to extend the LIP program through 2022 at as much as $1.5 billion annually.