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Hospitals fight over $1B fund

By Christine Jordan Sexton
2/11/2009 © Florida Health News

TALLAHASSEE—The biggest health care fight of the upcoming legislative session could be over an obscure state panel that recommends how to dole out nearly $1 billion for treating the poor and uninsured. 

The battle has already sparked a slick lobbying campaign featuring a TV ad that raises conflict-of-interest accusations against the members of the Low Income Pool, or LIP Council. Most of them work for hospitals.

Amid this backdrop of finger-pointing, a House spending panel today will examine the LIP Council’s blueprint on how to divvy up $948 million in Medicaid funding to Florida hospitals. The Senate will examine them the following week. 

The recommendations include $51.4 million for primary care at county health departments and clinics and two programs that help pay insurance premiums. The Agency for Health Care Administration sent the list to the legislature last week. 

Most of the Medicaid dollars would go to hospitals that treat a high percentage of indigent patients in Miami-Dade, Broward, Hillsborough, and Volusia counties.
But two bills (SB 556 and HB 285) have been filed by North Florida lawmakers to eliminate the LIP Council. Bill sponsor Sen. Don Gaetz, R-Niceville, said AHCA should make those recommendations as part of its legislative budget request and not rely on the panel. 

“We shouldn’t have a group of people, certainly not a body that the average Floridian knows nothing about, making these decisions,” said Gaetz, who chairs the Senate Health Regulation Committee. 

HCA Healthcare, a for-profit hospital corporation that has more than 40 facilities in Florida, supports the legislation, said lobbyist Steve Ecenia, who represents the company in the Legislature. Ecenia said a “very small” group of hospitals benefits from the recommendations made by the LIP Council and that “a lot of hospitals get less than what they deserve.” 

“This isn’t the way to allocate state dollars,” said Ecenia. “It’s a hard process to defend.” 

LIP Council member Dee Schaeffer, who heads a non-profit affiliated with Halifax Health, scoffs at the notion of any wrongdoing. 

“All we are doing is advising, it’s the Legislature that ultimately makes the decisions,” she said. “This is strictly an advisory body.” 

AHCA Secretary Holly Benson told Florida Health News last week that her agency has not taken a position on the legislation. AHCA has been “in discussions with the Legislature and the governor’s office” about the fate of the council, she said. 

Meanwhile, an industry tug-of-war is under way over how the state should spend the current estimates of Low Income Pool money, as well as the other Medicaid dollars that are made possible through county contributions.

Siding with HCA are the business lobbying group Associated Industries of Florida and a group called Floridians for Government Accountability, which has begun airing a TV ad in the Tallahassee area that calls on the state to abolish the LIP Council. The ad says the council is stacked with “special interests and lobbyists.” 

On the other side of the escalating battle are the “safety net” hospitals, which treat a large number of Medicaid and charity patients. Allied with them are the counties that supply most of the money for the Low Income Pool. 

According to the LIP Council’s final recommendations, counties are expected to provide more than $876 million in “intergovernmental transfers (IGTs)” next fiscal year for LIP and Medicaid. The money comes from local tax collections. 

No county contributes more to fund Medicaid programs for hospitals than Miami-Dade, which is expected to chip in more than $355 million to LIP.

Broward Health, formerly known as the North Broward Hospital District, is expected to contribute about $148 million, followed by South Broward Hospital District with $89 million. Both Halifax Hospital Medical Center Taxing District and Hillsborough County contribute close to $34 million. 

The LIP Council recommends that the highest net payments go to hospitals in those counties that contribute the most, although hospitals across the state will receive a share of LIP and other Medicaid dollars. 

So Miami-Dade’s Jackson Memorial would receive just over $249 million and Miami Children’s Hospital would get $44 million. Broward General Medical Center would receive nearly $52 million, Memorial Regional Hospital in Broward would get $41 million and Halifax Health in Volusia would receive over $17 million. 

The Low Income Pool was created as part of Florida’s Medicaid Reform waiver under the administration of former Gov Jeb Bush, which lets the state require non-institutionalized Medicaid recipients to be enrolled in tightly managed networks, such as HMOs. At the time, hospitals were unsure how the pilot project would impact their bottom lines. 

For the five-year life of the waiver, Florida is guaranteed up to $1 billion annually in federal funds, so long as the state ponies up the required match. The state has turned to the counties—especially those with tax-financing districts—to contribute the majority of the required matching funds to LIP and other Medicaid initiatives. 

The LIP Council, included in the final Medicaid Reform legislation, was given authority to make recommendations on spending both the LIP dollars and other Medicaid initiatives that use local money to help hospitals. 

“Because we are the funders of the program, we deserve to have a place at the table,” said Schaeffer.

--Contact Christine Jordan Sexton.