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Mental health gets $, others cut

By Jim Saunders

4/26/2010 © Health News Florida

House and Senate lawmakers today delayed a decision about reorganizing the Florida Department of Health, as they put the finishing touches on a budget that will cut funding for hospitals, nursing homes and other programs.

House leaders have made a priority of revamping --- and shrinking --- the Department of Health and injected the issue last week into budget negotiations. But while those negotiations likely will end tonight, lawmakers said they have until Thursday to resolve the Department of Health issue.

That is because they decided to deal with the issue in what is known as a "conforming'' bill --- a type of bill that goes along with the budget and is voted on separately.

"We're still working on all the conforming bills,'' said House Health Care Appropriations Chairwoman Denise Grimsley, a Lake Placid Republican who has worked on the reorganization proposal. "We had to get the budget done first.''

The House passed a bill last week that called, in part, for focusing the 17,000-employee agency on a series of core functions and developing plans to limit executive positions and reduce the number of divisions and bureaus. Senators never considered the bill before it became part of budget discussions.

Grimsley said one issue in the Department of Health negotiations involves a House proposal to move the Division of Medical Quality Assurance --- which deals with professional licensing and regulation --- to the Department of Business and Professional Regulation. Grimsley indicated senators do not want to go along with the move, which is opposed by doctors' groups.

Legislative leaders said Sunday, however, that another controversial proposal to overhaul the Medicaid system will not pass before the Friday end of the legislative session.

"It looks like major reform isn't going to happen this year,'' said Rep. Dean Cannon, a Winter Park Republican who has been a House leader on the issue.

Cannon and Grimsley said they expect to bring back the issue during the 2011 legislative session. The House proposed a sweeping plan that gradually would have led to almost all Medicaid recipients enrolling in managed-care plans, while the Senate proposed a smaller expansion of a pilot managed-care program.

"I really think that what we did is good policy,'' Grimsley said. "But at the end of the day, if we don't pass it this year, the sun will still rise on May 1 (the day after the legislative session ends).''

Cannon pointed to differences between the House and Senate as the main reason that a Medicaid overhaul will not pass. But Senate Ways and Means Chairman JD Alexander, R-Lake Wales, said aides to Gov. Charlie Crist made clear that the governor did not like parts of the House proposal and likely would veto it.

"It's pretty clear he had serious issues,'' Alexander said. 

But while lawmakers ruled out passing a bill this year that would shift Medicaid recipients into managed-care plans, the Senate has not killed a separate idea to explore eventually using private-insurance vouchers in the Medicaid system.
The Senate last month inserted the idea into the fine print of its budget and proposed it today to House budget negotiators. Like the Department of Health issue, House and Senate leaders said they expect to discuss the issue during the next few days as part of a conforming bill.

Along with giving vouchers to Medicaid recipients, the Senate's idea would be aimed at capping the state's Medcaid costs. It would be a radical change from the current structure of Medicaid and would need federal approval.

But with the other Medicaid overhaul proposals dying this session, Grimsley said she does not support moving forward with the Senate voucher idea.

"I think the best approach is to do a comprehensive plan that everybody comes to the table on,'' she said.

The discussions about Medicaid and the Department of Health came as lawmakers worked out the final details of the 2010-11 budget. Negotiators agreed Sunday to cut Medicaid payments to hospitals and chop millions of dollars for programs that serve pregnant women and babies.

Health and human services played a major role in the overall budget negotiations. The biggest cut approved Sunday was about $250 million, or 7 percent, in hospital-inpatient Medicaid rates. Earlier, negotiators agreed to a $63.4 million cut in outpatient rates.

Tony Carvalho, president of the Safety Net Hospital Alliance of Florida, said the cuts will affect hospitals in different ways. In part, that is because some hospitals will be able to offset cuts by using local tax dollars to draw down additional federal money --- what is known as a "buy back'' of the state rate cuts.

Also, negotiators agreed today to spend about $26 million to offset the rate cuts for Miami Children's Hospital and All Children's Hospital and for rural hospitals scattered across the state.

Negotiators appeared ready to agree on a proposal that could send an additional $52.3 million to the financially troubled Jackson Memorial Hospital in Miami. That money, however, is contingent on the state receiving a six-month extension of increased federal matching Medicaid money.

Like hospitals, nursing homes will see a 7 percent Medcaid rate reduction, totaling about $200 million. Lawmakers and nursing-homes lobbyists said repeatedly in recent days that they hoped to find a way to alleviate those cuts, but negotiators could not find a way.

The budget also will include smaller cuts to numerous health and human services programs. For instance, lawmakers agreed to cut nearly $12 million from the Healthy Families program, which provides services to women who are pregnant or have newborn children and are considered risks for child abuse and neglect.

George Sheldon, secretary of the Florida Department of Children and Families, said he thinks the cut --- which is about 40 percent of state funding for the program --- will lead to more children ending up in the foster-care system.

"The cut in Healthy Families, I think, is devastating,'' Sheldon said.

Mental-health and substance-abuse groups, however, got a victory today when negotiators came up with $14.4 million for programs that are dotted across the state. The Senate had proposed cutting money for the programs, but the House resisted.

"Those projects have been funded for many, many years, and they have become part of the infrastructure of those communities,'' said Mark Fontaine, executive director of the Florida Alcohol and Drug Abuse Association

The flurry of negotiations comes after a session dominated by budget problems. The economic recession slashed billions of dollars from the state's tax revenues in recent years; at the same time, costs have increased for programs such as Medicaid.

If legislative leaders hope to end the sesssion as scheduled Friday, they need to print and distribute the budget Tuesday because of a legally required 72-hour review period.

The $19 billion Medicaid program is a huge budget issue for the state, though the proposed House and Senate overhauls would not have saved much money in 2010-11 because of the length of time needed to carry out an expansion. The House proposal would have required almost all Medicaid recipients to move into managed-care plans over five years, while the Senate would have expanded a pilot program from five to 24 counties.

Senate Health and Human Services Approprations Chairman Durell Peaden said lawmakers need to take time to review and get input on changing Medicaid. House members approved their overhaul proposal last Monday, which senators said left little time to work on it.

But Peaden, R-Crestview, said Medicaid eventually will need changes.

"Something's going to have to be done in the future and something's going to have to be done to manage the ever-increasing costs,'' he said.

--Capital Bureau Chief Jim Saunders can be reached at 850-228-0963 or by e-mail at