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$267M Demand Is Not Coercion: FHA

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Federal health officials are issuing audit reports and rushing to collect $267 million in alleged overpayments to some Florida hospitals to close the books on an old program, says Florida Hospital Association President Bruce Rueben.

FHA argues against a rush to judgment, saying some of the audits are still preliminary. Also, the group says, it’s unreasonable to expect hospitals to repay millions of dollars in one year. 

But those who see the audits and payment demands as a federal push to force Florida to accept Medicaid expansion are just wrong, Rueben says. "It is not punishment; it reflects a change in federal policy.".

Leaders at the Centers for Medicare and Medicaid Services (CMS) are just trying to close out the books on  the Low Income Pool fund, he said. That program matches local and state funds to provide higher Medicaid rates to "safety-net hospitals" that have a large share of uninsured patients.

By making coverage available to the uninsured, through tax subsidies and expanded Medicaid, the Affordable Care Act was to have made the low-income pool unnecessary. The propped-up payments for certain hospitals were to have been phased out by now.

But in 2013, the Florida Legislature rejected the federal money related to the health law, including $51 billion over 10 years that could have covered nearly 800,000 low-income adults. That means hospitals lack the cushion that was to make the higher pay rates unnecessary.

Over the weekend, a Times/Herald Tallahassee Bureau report about the audits and alleged overpayments quoted a Jackson Health System executive as suspecting they were intended to coerce more cooperation from state officials. Jackson faces a whopping overpayments levy: $47 million, the Times reported. It said Tampa General Hospital would be forced to repay $13.3 million.

The  Agency for Health Care Administration saw continuation of the Low-Income Pool as vital. AHCA asked for five years, but got just one year and $2 billion, as Health News Florida reported in April. The final round of LIP funding was set to begin July 1.  (The fund is discussed in a 97-page draft report on the state's waiver request to continue its managed-care project.)

Health News Florida Editor Carol Gentry caught up with Rueben on Monday, while he was at the Atlanta airport, speaking on a cell phone.  Listen to the 3 ½-minute conversation, or check the transcript below.
 

Bruce Rueben: In the past, before the Affordable Care Act, for states with high numbers of uninsured , they had the  potential to get extra payment for services rendered to people to reflect the higher cost of dealing with large numbers of uninsured. But since the Affordable Care Act passed, the feds are saying:  We now deal with that issue by providing coverage for people, not by paying more in Medicaid rates for hospital services.   So in Florida’s case, Florida has opted so far not to extend coverage and take that federal money for that purpose.

What they’re saying is: Florida, it’s your decision whether to cover these folks through the Medicaid program, but if you decide not to, we’re  not going to continue to  provide a Low Income Pool to increase the amount of money that hospitals get for dealing with high numbers of uninsured because we handle that through the Affordable Care Act.

Gentry: If there were a sudden change of heart and the state did adopt Medicaid expansion, would you still have to pay back this $267 million? Where does that come in?

Rueben: Yes, the $267 million, that’s an alleged amount; it’s not certain that amount of money is owed.    These alleged overpayments, these things happen. I wouldn’t say it’s common, but it is routine from year to year in virtually every state in the country, some hospitals are overpaid, some hospitals underpaid, there’s a reconciliation process.

That’s what has happened here. But in this case, because the Medicaid program and the Low Income Pool in Florida is only approved for one last year,  the federal government is saying, "Let’s go ahead and get all of that done in one year." There’s some concern over doing that, over paying it all up in one year, eight years' worth of alleged  overpayments, without knowing that money is actually owed. There’s no reason   to rush it.

Gentry: So there is no modus operandi here, the hospitals crying out in hopes that the state will hear them and quickly pass Medicaid expansion?

Rueben: No, that’s not a realistic hope. The two things are not connected together in that way.

Gentry: Do you have a sense whether there are a lot of hospitals that are going to be in trouble if they do require the payback in a year?

Rueben: What we don’t know is which hospitals these alleged overpayments are tied to. So it’s not all hospitals.

All of this is fairly uncertain, that’s why I think that’s why some people are deeply concerned about having to move forward with this so quickly.

Gentry: Okay, so the thing that’s new is the accelerated schedule because of the program closing? It’s not new that there are audits going on and alleged overpayments or underpayments or whatever.

Rueben: No, that’s been part of Medicaid program since the beginning. But what is new is they would look at eight  years of alleged overpayments and them say here’s the number we think it is and we want you to pay it all back right now even though that number is not firm, it’s  made up of estimates and projections.

--Health News Florida is part of WUSF Public Media. Contact Editor Carol Gentry at 813-974-8629 (desk) or e-mail at cgentry@wusf.org. For more health news, visit HealthNewsFlorida.org.