FL Hospitals Could Lose $1.3 Billion

Jan 16, 2015

Florida’s safety-net hospitals stand to lose 15 percent of the money it receives from Medicaid next year, if state and federal officials don’t renew an agreement to cover care for poor state residents.

Credit Taber Andrew Bain, via Flickr Creative Commons

An independent report released Thursday shows that the ending of the so-called Low-Income Pool funding would result in an immediate $1.3 billion in federal Medicaid money. A total of 124 Florida hospitals would be affected, according the Agency for Health Care Administration.

Several key factors led to the situation, according to the 244-page report from Navigant Healthcare consultants. That includes the state’s transition from a fee-for-service Medicaid program to one using managed care, and the Legislative decision the past two years to not expand Medicaid coverage under the Affordable Care Act.

“This appears to be one of the unintended, but common consequences associated with a transition to a capitated managed care model. Shifting the financial risk from the State to the Medicaid managed care plans also means that the State is passing substantial control of how payments are made over to the plans,” the report said.

Right now, the low-income fund and a second source of funding from the federal government are set to expire June 30, in part because the federal government is transitioning to new payment models. The Centers for Medicare and Medicaid Services did issue Florida a one-year extension to this money, but requested the independent report before discussing any new agreements with Florida officials.

This report backs up other recent reviews of the state’s care for the poor and uninsured. Florida Legal Services predicts a $2 billion loss to not only safety-net hospitals, but also to community health centers and health care providers who treat the poor.

--Mary Shedden is a reporter with WUSF Public Media in Tampa. Health News Florida receives support from the Corporation for Public Broadcasting.