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Gov’s Hospital Commission Brings Deja Vu

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Florida Tax Watch
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Gov. Rick Scott’s call for an investigation of hospital finances, officially issued this week, had a familiar ring to Floridians in the health-care industry.

“My first thought was, ‘Gee, didn’t we just do that?’” said Linda Quick, president of the South Florida Hospital and Healthcare Association. She was one of those asked to testify at a 2011 hearing held by Scott’s first hospital-financing panel, created shortly after he was sworn into office.

That one, the Commission on Review of Taxpayer Funded Hospital Districts, had a different title than the new one, the Commission on Healthcare and Hospital Funding. But their objectives were similar: to raise hard questions about the use of taxpayers’ money in health care.

The targets: government-owned and private non-profit hospitals that receive direct subsidies and higher payment rates than other hospitals. 

Scott’s order says he wants heavy scrutiny of public health-care programs, especially Medicaid – the joint state and federal insurance program for certain low-income groups, such as children and the elderly – and a state regulation that requires health-care facilities to prove there is a need before getting a certificate to build one.

"Let's look at  how we're spending our tax dollars," Scott told reporters at an informal question-answer session Thursday. "Are we getting a good return for taxpayers, the ones who are putting the money up?"

The chairman of the first commission, Florida TaxWatch President Dominic Calabro, thought Scott and some members of the panel wanted to find enough ammunition to justify getting rid of local hospital taxing districts.  But that didn’t happen.

Calabro says the panel found each hospital district was different.  Some taxing districts had “predatory practices, where money was treated with close to reckless disregard,” he said. But others were honest brokers and had strong support in their communities.

Hospital taxing districts are an anachronism, Calabro said, created to cover the costs of indigent care in the years before the 1965 creation of Medicaid.  But legislators would not vote to get rid of them, he said.

“People don’t like the idea of taxing districts, but don’t want to give up their own,” he said.

The first commission held 14 meetings before issuing a report in December 2011, which was much milder than expected. It didn’t call for privatization of public hospitals or abolition of taxing districts; instead, it recommended several ways to avoid conflicts of interest and asked for a fairer distribution of funds.

While some of those reforms have occurred, the report has had little impact. Whether Scott gets what he wants from the new commission, said Quick, “depends on who is appointed and who is executive director and what process they use.”

Scott’s executive order, dated May 5, says he will appoint all members of the commission, including its chair, and will designate an executive director. State employees from the Agency for Health Care Administration will provide staff support. His press office also released a list of topics to be studied.

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Credit Florida Office of the Governor
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The timing led some to suspect that Scott’s order creating a new commission was meant as a rebuke to the state’s hospitals.  In the just-past legislative session, hospitals lobbied hard for passage of a Florida Senate proposal to accept billions of dollars under the Affordable Care Act. It would provide insurance coverage to about 800,000 of Florida’s low-income uninsured.

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Credit Linked In
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Linda Quick, president, South Florida Hospital and Healthcare Association

In his executive order, Scott says he wants the commission to “investigate the extent to which taxpayer-funded hospitals pay for lobbyists, campaign contributions, and advertising.” While all hospitals receive taxpayer funds, especially from Medicare, Scott is thought to be referring to two categories of hospitals: publicly owned, like Jackson Memorial, and private non-profit hospitals like Tampa General that receive extra tax money because they treat a disproportionate share of the uninsured.

Scott’s order says he wants to know whether public funds cause health-care costs to rise and whether they improve access and quality of care. He wants to know whether Medicaid patients have better or worse outcomes than others and whether “certificate of need” laws have a positive or negative effect on affordability.

In the list of tasks he wants the commission to carry out, Scott uses the word “investigate” a dozen times.

That caused Quick to say she suspects Scott has an agenda that could harm members of her association. She said of the new commission: “It’s a waste of money and a waste of time, a diversion from what we ought to be dealing with.”

Quick was referring to the fact that Florida’s House and Senate have not been able to reach a budget for the state’s fiscal year starting July 1. At issue are two related health-care disputes: whether Florida will accept federal funds to expand coverage to the poor through a privatized version of Medicaid, and whether federal health officials will renew the state’s request for a continuation of $2.2 billion in funds for hospitals and clinics. This “Low Income Pool (LIP)” funding stream is scheduled to expire June 30.

Florida officials have sued the U.S. Department of Health and Human Services in federal court, claiming that HHS is trying to force the state to accept federal Medicaid expansion funding by threatening the loss of LIP funds. Federal officials have said there is no quid pro quo, that the LIP program was set up to be temporary and was already extended for a year at Florida’s request.

Scott went to Washington to see HHS Secretary Sylvia Burwell on Wednesday in hopes of winning a verbal assurance of continued LIP funds, even though legally HHS can’t act until the end of a public comment period.  Burwell made no explicit denial, but notes from the meeting make clear she offered no encouragement either, saying Florida had not taken the steps HHS required in order to justify continued funding.

Scott left unhappy, and on Thursday the state’s legal team asked a federal judge in Pensacola for an injunction requiring HHS to reconsider LIP funds for Florida without regard to the state’s decision to opt out of Medicaid expansion.

Quick and four other Florida hospital executives, who were in Washington for an American Hospital Association meeting, were invited to meet with Burwell along with a couple of dozen others on Wednesday just before Scott arrived, Quick said.

The hospital executives wanted the same thing Scott did – continued LIP funding – although the hospitals and the governor continue to disagree vehemently on the question of taking Medicaid funds to cover the uninsured.

Carol Gentry is a special correspondent with WUSF in Tampa. Health News Florida receives support from the Corporation for Public Broadcasting.