MM Curator summary
[MM Curator Summary]: Hospitals are crying foul, but legislators say hospitals are crying wolf because the hospitals just got $100M in the direct payments program for Medicaid.
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Health care funding
As state legislators head into budget negotiations, both chambers have agreed to eliminate additional “critical care” funding for hospitals that treat the most Medicaid patients. Those dollars are used to give automatic rate enhancements to those hospitals. And Gov. Ron DeSantis, in his budget recommendations, included recurring funding for the hospitals.
But House budget writers didn’t just eliminate the so-called critical care fund. The House recommended removing an additional $100 million in state money (which is matched with federal Medicaid funds) currently used to reimburse hospitals and steer the money instead to help train future nurses. All told, it’s a nearly $252 million reduction to hospital inpatient and outpatient reimbursement rates and a $100 million bump to higher education.
House leaders defend the move because hospitals are getting money from a new supplemental Medicaid financing program called Direct Provider Payment or DPP. DPP is allowable under a federal waiver and lets hospitals use funds to bridge the difference between Medicaid reimbursements and their costs of providing the care. Florida does not contribute any state dollars to the DPP program. Instead, it is funded with local tax dollars generated by hospitals.
“They are contorting themselves because they believe they never should be cut,” said House Speaker Chris Sprowls, who pointed out that hospitals had their “second-best year” last year because of the enhanced funding they received. “They have a significant influx of money … and all we hear is ‘oh the sky is falling.'”
Sprowls also said it’s time to act because the state has a “significant nursing shortage,” and hospitals should have “skin in the game” to solve the problem.
Florida Hospital Association President and CEO Mary Mayhew, whose association commissioned the report that identifies the current and looming shortfall, said the goal to increase education funding is laudable. Hospitals currently partner with colleges and universities to train staff, she said. But, she noted, increasing education funding “really shouldn’t be supported at the state level through a cut to hospitals.”
Mayhew also said she is worried about the state’s commitment to helping fund the Medicaid program. Medicaid is administered and funded jointly by the state and federal governments. Mayhew said removing $100 million in general revenue is troubling.
She said just 4% of the general revenue in the current state fiscal year budget was spent on hospital funds.
“We are not driving general revenue (commitments),” she said, adding, “What is the problem we are trying to fix with all the money? There’s no hole; there is no general revenue hole in the state budget,” Mayhew said. “I recognize they are looking over the entire state budget, but I have to raise awareness around the consequences of cuts to hospitals and the care they provide to Medicaid patients.”