Florida lawmakers are releasing initial budget proposals that grapple with shortfalls caused by the COVID-19 pandemic - even though the prospect of billions of dollars coming to the state from Washington might render the plans somewhat meaningless in the weeks to come.
The Senate on Wednesday released an austere health care spending plan for the upcoming fiscal year that would whack funding for hospitals, kick 19- and 20-year-olds off the Medicaid rolls and reduce spending on services meant to keep people with intellectual and developmental disabilities out of institutions.
The proposed spending plan released by Senate Health and Human Services Appropriations Chairman Aaron Bean, R-Fernandina Beach, earmarks $42.3 billion in state and federal revenue to help fund Medicaid and other health care programs.
“I call it the live-within-your-means budget,” said Bean, who noted that Medicaid and other health and human-services programs took up $11.7 billion in state general revenue, which comes primarily from sales taxes.
The release of portions of the Senate’s overall budget proposal Wednesday marked the beginning of what will ultimately be a spending plan negotiated by Senate and House leaders. Lawmakers are considering hundreds of bills during the 2021 legislative session, but they are required to pass just one: the general appropriations act, more commonly known as the budget.
The Senate’s proposals do not include upward of $10 billion in additional funding that is slated to come to the state after passage of the $1.9 trillion federal stimulus package dubbed the American Rescue Plan Act. Also, the Senate proposals rely on revenue estimates that were calculated in December and which will be recalculated by economists this spring.
The initial run-through, however, put some health care providers on edge. Hospitals, for example, took the largest hit in the Senate’s plan with a proposed $251.2 million reduction to inpatient and outpatient base Medicaid rates, a cut that would affect all hospitals.
“If you're in the hospital business it’s been a challenging year,” Bean said. “And under this proposed budget it’s going to stay challenged.”
Additionally, the proposed spending plan would eliminate $77.3 million directed to hospitals that treat large numbers of Medicaid patients.
Bean said lawmakers took into account money that hospitals received through the federal CARES Act, a stimulus package that passed last spring, when developing the budget. Additionally, the Senate spending plan proposes new opportunities for hospitals to take advantage of what is known as “supplemental” Medicaid funding to offset the reductions.
The state’s largest hospital association released a statement pointing to the bad timing of the proposed reductions.
“As Florida recovers from the COVID-19 pandemic, now is not the time to cut critical state funding to a vital safety net program and to the hundreds of thousands of doctors, nurses, and hospital staff who provide care to Medicaid patients,” Florida Hospital Association President and CEO Mary Mayhew said in a prepared statement. “Our health care heroes risked their lives, and that of their families, to protect and care for us - they need our support now more than ever.”
The Senate plan does not recommend any Medicaid reductions for nursing homes.
The Florida Health Care Association, the state’s largest nursing-home industry group, issued a statement that said nursing-home payment rates need to be maintained despite the tight budget.
“COVID-19 has had a significant financial impact on our care centers, and while vaccines are giving us hope toward a return to normalcy, providers are still experiencing exceptional financial challenges resulting from increased testing and staffing costs, along with reduced occupancy levels,” the statement said.
Since the start of the COVID-19 pandemic more than a year ago, enrollment in Florida’s Medicaid program has increased by hundreds of thousands of people, with as many as 4.5 million enrollees in the program that offers health care to poor, elderly and disabled people.
To help Florida - and other states - offset costs due to Medicaid enrollment spikes, The federal government agreed to increase the amount if it provides the state by 6.2 percentage points.
The Senate spending plan recommends that the state stop providing Medicaid services to 19- and 20-year-old residents, with the exception of pregnant women, people in foster care and people with developmental disabilities. The federal government does not mandate that Medicaid cover 19- and 20-year-olds.
Also, the Senate is recommending the elimination of other optional offerings - including adult vision, hearing, chiropractic and podiatric services, as well as an over-the-counter drug benefit. In all, eliminating the optional beneficiaries and services would save $111 million.
The Senate also is proposing that the state slightly reduce funding for the Agency for Persons with Disabilities program known as iBudget, which provides home and community-based services to people with intellectual and developmental disabilities. The proposal would reduce funding by $3.2 million.
The House is slated to unveil its proposed health care spending plan Thursday. But House Speaker Rep. Chris Sprowls, R-Palm Harbor, announced Tuesday that the House will propose directing $90 million in state funding to provide Medicaid benefits for one year to postpartum women earning 185 percent or less of the federal poverty level. The current state policy is to provide coverage to those women for only two months after they have babies.
A glimpse at pending House legislation also shows a push to make nursing homes report audited financial data to the state within 120 days of the end of their fiscal years.
The Florida Health Care Association says reporting such detailed information could cost between $18,000 to $24,000 per center. Hospitals have been reporting similar data to the state since 1992.
“In the face of so many other financial challenges, providers cannot be expected take on this unfunded mandate in a time of increased costs without jeopardizing quality of care,” Kristen Knapp, a spokeswoman for the association, said in a statement to The News Service of Florida.
”We look forward to working with the House to ensure that any data reporting system provides appropriate transparency without imposing a negative impact on the resources providers need to effectively deliver high-quality care.”
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