Nursing homes would get a nearly 4 percent increase in what they are paid to treat frail, elderly Floridians, while $318 million in Medicaid funding would be redistributed among the state’s hospitals, under a proposed spending plan released Wednesday by a Senate budget panel.
Senate Health and Human Services Appropriations Chairwoman Anitere Flores, R-Miami, called the proposed spending plan an early first draft and said it could change when considered by the full Appropriations Committee.
The proposed budget contains more than $130 million in state and federal funds to increase payments to nursing homes, which Senate President Joe Negron, R-Stuart, identified in December as a “very strong” priority.
Flores on Wednesday said nursing homes are “very important and crucial for Florida’s elderly population” and said the Senate “has always had a strong desire to recognize that support that the nursing homes provide.”
Meanwhile, Medicaid HMOs could be on the chopping block for the first time in many years. While Flores said premiums would be reduced by an average $8 a member per month, going from an average of $312 to $304, the proposed budget would reduce the premiums paid to HMOs by more than $230 million in state and federal dollars.
While the Legislature routinely recommends reductions — or increases — in Medicaid rates paid to health care providers, it generally doesn’t set the rates for Medicaid HMOs because of a federal mandate that their rates be actuarially sound. The state Agency for Health Care Administration works closely with the Milliman actuarial firm every summer to determine premiums, and the new rates take effect in October.
Audrey Brown, president of the Florida Association of Health Plans, said her association still was reviewing the budget proposal but stressed that the statewide Medicaid managed-care program, “continues to meet the goals set forth by the governor and Legislature, which includes providing access to high-quality health care services while respecting every taxpayer dollar.”
Brown said her group will work with the Senate “to understand the expectations surrounding these cuts.”
Flores told The News Service of Florida that the proposed reduction was taken from a schedule of cuts initially offered by the Agency for Health Care Administration as part of a mandatory budget-cut exercise. She said the Senate proposed a smaller cut than what the agency offered as part of the reduction exercise and, therefore, she isn’t worried that the rates aren’t actuarially sound.
That wasn’t the only proposed reduction offered up by the agency that the Senate included in its budget proposal.
Flores’ plan would trim from three months to one month the “lookback” period in which the state agrees to absorb people’s health-care bills before they officially qualify for Medicaid. The move would impact mostly hospitals and would save more than $37.5 million in state general revenue dollars. When combined with federal matching dollars, the reduction would total just under $100 million for the year.
Other changes the Senate is proposing to hospital payments include eliminating what Flores called “enhanced payments” that currently are made to 28 hospitals across the state. Her plan is to use that money and put it in the rates hospitals are paid for providing care.
Negron said Wednesday night that the Senate wants to take a closer look at how hospitals are paid to ensure Medicaid funds “follow the patients,” no matter which facilities they are treated at. Negron said “it’s time” to make sure that the distribution of Medicaid dollars is “fair to all hospitals.”
“I think that you will see the Senate take a very comprehensive look at how hospitals are paid,” Negron said, stressing that the goal isn’t to reduce the payments but to redistribute them.
The Senate budget includes $1.5 billion in supplemental Medicaid payments through the Low Income Pool program, commonly called LIP. However, hospitals say rules surrounding the LIP program have changed, limiting how the money can be spent. Those limitations have made it difficult for the state to collect the necessary matching dollars from local governments to fully tap into the $1.5 billion in spending authorized by the federal government.
Flores acknowledged that the state might not be able to tap into the full $1.5 billion but said that "everyone agrees they’ll at least get $800 or $900 million, which is still a pretty significant number.”
Florida Hospital Association President Bruce Rueben said his association is reviewing the proposed recommendations to fully understand their impact.
“It is clear that the Senate budget proposal will redistribute large amounts of funding cuts between, and among, hospitals,” he said. “That will have consequences, both intended and otherwise, which we are working to understand.”
The Senate, though, has included $50 million to reduce the amount of recurring cuts that the Legislature agreed to make to hospitals last year, something Rueben said his association is ‘deeply grateful for.”
The spending plan is in stark contrast with a proposal that was released Tuesday by House Health Care Appropriations Chairman Rep. Jason Brodeur, R-Sanford. That plan didn’t include any reductions to Medicaid HMOs or increases for nursing homes. Additionally, the House budget didn’t redirect Medicaid payments to hospitals.
The House and Senate will try to work out their differences in the coming weeks as a final budget is negotiated for the 2018-2019 fiscal year, which starts July 1.
Along with proposing a $130 million increase for nursing homes, the Senate would spend an additional $10 million to help the industry transition from the current cost-based reimbursement system to what’s known as the prospective payment system. The $10 million would be targeted toward facilities that would lose money under the change, said Tom Parker, director of reimbursement for the Florida Health Care Association, a major industry group.
Noting that the House budget doesn’t include the additional funding for nursing homes, Flores acknowledged that the Senate’s proposed increases could be a “sticking point” between the two chambers.