Feds' Action Puts Pressure on FL

Apr 15, 2014

Changes in the funding formula for Medicaid that will take many millions of dollars away from large safety-net hospitals such as Jackson Memorial and Tampa General are getting lawmakers' attention, now that it's clear the federal government isn't going to pull the state's fat out of the fire.

The "tiered" indigent-care funding for Florida hospitals, which would have the effect of sending tax-money raised in some counties to others that didn't pay in, needs another look, Rep. Matt Hudson, R-Naples, told the Times/Herald Tallahassee Bureau (paywall).

Hudson, chair of Health Care Appropriations, is playing point man for the House on health matters during budget negotiations.

The change in the funding formula was passed in 2011 as part of the shift to a statewide Medicaid managed-care system. It wasn't really noticed at the time. 

But with implementation looming in July, safety-net hospitals in counties that have taxing districts are really starting to worry.  That worry ratcheted up late Friday, when  federal health officials turned down Florida's request for $4.5 billion in Low Income Pool (LIP) funds over three years. Hospitals had hoped that would offset their losses.

Instead, federal officials granted a one-year, $2.2 billion boost in LIP, with  no extension. That sent a signal that Florida lawmakers will be under pressure to do something they don't want to do -- accept federal funds under the Affordable Care Act for Medicaid expansion, or some other version of coverage for the low-income uninsured. The House in particular has been unwilling to accept the $51 billion over 10 years that the ACA  made available for that purpose to Florida.

The change in the funding formula is extremely complex. Called "tiering," it was explained in a Tampa Bay Times article March 1 (paywall alert).

In the past, the counties that raised local tax  money to subsidize indigent care by drawing down matching federal dollars got nearly all the money back, to be used locally. But now that money is to be shared with counties that don't tax their own residents for indigent-care match.