As Gov. Rick Scott and Florida lawmakers struggle with massive budget problems, they are resurrecting an old idea: Chop the Medically Needy program.
The program, which serves about 40,000 people with debilitating illnesses and staggering medical bills, survived past attempts to dramatically cut its funding. But Scott and Senate leaders are pushing new proposals that would leave only a minimal amount of Medically Needy services.
Hospitals are already gearing up to fight the cuts, which officials estimated Tuesday could cost the industry about $800 million a year. Tony Carvalho, president of the Safety Net Hospital Alliance of Florida, said six teaching hospitals --- which serve large numbers of low-income and uninsured patients --- would lose about $330 million.
Carvalho said the serious nature of the illnesses means Medically Needy participants would still need hospitalization. He said that would lead to shifting costs to hospitals, local communities and customers of private insurance plans.
"Eliminating (Medically Needy) hospital coverage for this population doesn't create any new cost containment,'' Carvalho told the House Health Appropriations Committee, which heard a presentation on the program.
But Senate Health and Human Services Appropriations Chairman Joe Negron, R-Stuart, said last week the state doesn't have the money to pay for all the services it has in the past.
House Health Appropriations Chairman Matt Hudson, R-Naples, also left open the possibility of cutting the program, though he did not take a firm stance.
"Everything is on the table,'' Hudson said after Tuesday's committee meeting.
The Medically Needy program has survived a series of proposed cuts in recent years, with lawmakers patching together money to keep it going. But it also faces rising costs during tough budget times, going from $763 million last fiscal year to about $1 billion this year --- and a projected $1.4 billion next year, according to the Agency for Health Care Administration.
Medically Needy enrollees are those who have incomes above the Medicaid level but fall ill and become buried under medical debt. They include cancer and transplant patients.
Except for pregnant women and children, Scott has proposed limiting the program to physician services. His proposal would take effect July 1, 2012, which would not provide any savings during the upcoming 2011-12 fiscal year.
A Senate proposal released last week to overhaul Medicaid includes similar limits on the Medically Needy program. It would rename the program the "Medicaid nonpoverty medical subsidy.''
Even if lawmakers approve cutting the Medically Needy program during this spring's legislative session, it still would require approval from the federal government.
Roberta Bradford, AHCA's deputy secretary for Medicaid, estimated the federal approval process could take nine months. If so, that likely would follow Scott's timeline of waiting until July 2012 to make the changes.
-- Capital Bureau Chief Jim Saunders can be reached at 850-228-0963 or by e-mail at jim.saunders@healthnewsflorida.org.