Hospitals Seek Medicaid Hike As Revenues Plummet
Facing employee furloughs and pay cuts because of declining revenues, some major Florida hospitals are asking Gov. Ron DeSantis for help.
Safety net hospitals want DeSantis to use a portion of $1.6 billion in increased federal Medicaid funds coming to Florida to increase the amount Medicaid reimburses hospitals for providing obstetrical care and treating COVID-19 patients. The request comes as hospitals have stopped non-essential health procedures and have shut down other services to prepare for a surge in COVID-19 infected patients.
Lindy Kennedy, president of the Safety Net Hospital Alliance of Florida, sent a letter Sunday to DeSantis and Agency for Health Care Administration Secretary Mary Mayhew telling them that Florida’s hospitals have seen “marked reductions in revenue.
“We would ask you to keep in mind that hospitals are businesses, just like restaurants and cruise lines, and have seen marked reductions in revenue due to precipitous drops in non-COVID patient care and elective procedures,” Kennedy wrote in the letter. “We too, are struggling to make difficult choices regarding staff furloughs, clinic operating hours, etc.”
The governor’s office did not immediately answer questions about the increased federal Medicaid dollars or whether he has considered using it to help the hospitals. The Safety Net Hospital Alliance of Florida represents public, teaching, children’s and regional perinatal intensive care hospitals.
Medicaid is a health care program that provides care to poor, elderly and disabled residents. It is funded jointly by the state and federal government.
Prior to the coronavirus epidemic, the federal government contributed about 61 cents of every Medicaid dollar and Florida was responsible for the remaining 39 cents.
This means higher federal contributions to the program would lower the financial burden on the state.
Congress recently agreed to increase the amount the federal government pays and will now be responsible for about 67 cents of every Medicaid dollar. Florida is expected to receive $1.6 billion in additional funding.
Kennedy’s association estimates the change in the federal contribution rate frees up about $93 million in state general-revenue money that was previously slated to help pay for inpatient hospital care. The association is asking that somewhere between $51 million and $69 million of that money be used to increase payments for obstetrical services.
Kennedy said the rate increases are justified because the costs of providing the care have increased as hospitals have to comply with disease control protocols.
“These activities have significantly increased the cost of providing obstetric, newborn, and neonatal service,” she wrote. “Other than COVID-19 -related patient care, obstetrics is the only care delivery line of business that has remained steady.”
The federal government has already agreed to increase by 20 percent the amount Medicare reimburses hospitals for providing treatment to COVID-19 patients. In her letter, Kennedy said Florida Medicaid’s program should do likewise, but unlike Medicare, Medicaid should pay hospitals the additional 20 percent even when a COVID-19 test result is negative or delayed.
“The care delivery process is identical regardless of their final diagnosis,” Kennedy said.
As of Monday morning, Florida had 13,324 confirmed cases of the coronavirus, which causes COVID-19. Also, 236 residents had died. Nationwide, there were 330,891positive cases and 8,910 deaths, though public health officials have warned that the number of deaths in the United States could reach as high as 100,000.
The safety-net association’s letter came after hospital systems across the state announced furloughs and pay cuts in response to plummeting revenues.
Carlos Migoya, CEO of Miami’s Jackson Health System, sent a memo to employees on Friday announcing pay cuts for top executives and furloughs.
Sarasota Memorial Health Care System also announced Friday that it was going to furlough employees after it experienced a $16 million reduction in revenue in March. In a news release, for example, the hospital system said the number of hospital inpatients fell 30 percent, patient volume decreased by 45 percent at its two emergency-care centers and 66 percent at seven urgent care centers it owns.
But other types of hospitals also are announcing layoffs. The for-profit Tenet Healthcare announced last week that it would furlough 500 corporate and non-patient care workers, with “ongoing evaluation of additional actions.” Tenet has hospitals, stand-alone emergency centers, outpatient services and surgical centers in Broward, Miami-Dade and Palm Beach counties.