Senate Leaders Press For Change In Hospital Funding

A proposal to redistribute hundreds of millions of dollars away from safety-net hospitals and toward increasing base Medicaid payments at all hospitals drew opposition Wednesday in the Florida Senate.

But Senate Republican leaders were able to beat back a proposed amendment by Sen. Jose Javier Rodriguez, D- Miami, that would have scrapped the plan and maintained current law, which directs upward of $318 million in enhanced Medicaid payments to 28 hospitals with Medicaid caseloads of 25 percent or greater.

Senate Health and Human Services Appropriations Chairwoman Anitere Flores, R-Miami, said the budget plan is a fair redistribution of what she called “special project funds” and said it’s something the Legislature should have done years ago.

“I am very hopeful that this is the year we pass a budget that actually does this,” Flores said of the Senate’s plan.  “Where we actually say, ‘Hospitals thank you for opening your doors, for not asking questions.’”

Flores says every hospital in the state provides Medicaid care and charity care.

“The fact remains that under today’s system that there are hospitals across the entire state that we represent that don’t ask (about ability to pay), that don’t get any of that money and still provide the care,” she says.

Specifically, the Senate plan would eliminate automatic rate enhancements paid to the 28 hospitals and use the money, instead, to beef up base Medicaid rates for all hospitals.

The Senate budget plan also would provide $50 million in general revenue, which, when matched with federal Medicaid dollars, would total $130 million. The plan would redirect that funding to base rates. As a result, the Senate plan would increase Medicaid base rates from $3,426 to $4,049 for each hospital admission.

Because the base rates would be increased, the Senate plan would benefit any system that owns more than one hospital, such as HCA, Tenet, Community Health Systems, BayCare, and Adventist Health System. HCA, which owns 43 facilities in the state, could see nearly $40.5 million in Medicaid increases under the Senate plan.

Conversely, Jackson Memorial Hospital in Miami faces more than a $59 million reduction, UF Health Shands in Gainesville faces more than a $20 million hit and Tampa General Hospital could lose nearly $14.7 million.

The Senate is expected Thursday to approve its proposed budget, setting the stage for negotiations with the House in the coming weeks on a final spending plan for the fiscal year that starts July 1. The Senate’s proposed changes in hospital funding could be a key issue in negotiations.

House budget chairman Rep. Carlos Trujillo, R-Miami, already has indicated that the Senate’s proposal could face an uphill battle in the House, telling reporters last week that Jackson Memorial and other facilities are “essential to the well-being of our residents. As for some of the for-profits, we’re much less sympathetic.’’

Before the floor debate Wednesday, staff members from the Safety Net Hospital Alliance of Florida met with members of the Senate Democratic caucus to discuss the impact of the redistribution plan on its members. The alliance represents public, teaching and children’s hospitals.

Lindy Kennedy, executive vice president of the alliance, told Senate Democrats that it’s been long-standing policy to give additional payments to hospitals that provide large amounts of charity care. The policy, she said, is a recognition that Medicaid pays just 60 cents of every dollar hospitals spend caring for Medicaid patients and that hospitals treating large numbers of Medicaid patients can’t afford the loss.

Safety Net Hospital Alliance of Florida President Tony Carvalho says three of the four largest teaching hospitals would be cut $94 million under the Senate plan.

But Senate Minority Leader Sen. Oscar Braynon, D-Miami Gardens, reminded his members and the Safety Net Hospital of Florida lobbyists that the Senate has stood behind the industry for the last four years.

In 2015, for example, the Senate championed a Medicaid expansion under Obamacare, which would have increased the amount of federal funding flowing to the state. The Senate also was able to secure additional state funding for hospitals after the federal government reduced the amount of supplemental Medicaid dollars coming to the state.

“It’s amazing now that all of a sudden the House is a hero after they cut you all for almost half a decade,” Braynon said during the meeting. “I want to keep it in that frame of mind. That the people that we seem to have a slight problem with … are the people that have been for the most part trying to fight to keep hospitals” from getting cut.

His comments may have resonated with some Democratic members. Sen. Kevin Rader, D-Delray Beach, and Sen. Darryl Rouson, D-St Petersburg, opposed Rodriguez’s amendment.

The hospital financing issue isn’t the only difference between the Senate and House budgets, but it is one of the larger differences. During debate on the Rodriguez amendment, Senate Appropriations Chairman Sen. Rob Bradley, R-Fleming Island, told senators that it was “is an important issue as we move into conference.”

Among other health-care spending differences, the Senate has included $130 million in additional funding for nursing homes and it also has proposed cuts to Medicaid HMOs, reducing the amount of premiums paid to the health plans from $312 per member per month to $304 per member per month.

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