House proposal would slice Medicaid reimbursements for nursing homes, hospitals

MM Curator summary

Florida lawmakers have proposed a 2% cut to nursing home payments as part of efforts to control Medicaid costs.


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by: Christine Sexton

News Service of Florida

A top priority of Florida House Speaker Chris Sprowls to extend the length of time that women with newborns can receive Medicaid benefits might be coming at the expense of nursing homes and hospitals.

The House on March 25 rolled out a health care spending proposal that includes deep cuts, including slicing Medicaid reimbursements to nursing homes by 2%, or $80.4 million in state and federal funding.

The proposal, unveiled by House Health Care Appropriations Chairman Bryan Avila, R-Miami Springs, for the upcoming 2021-2022 fiscal year would spend less than what the Senate has proposed.

Florida Health Care Association President Emmett Reed said the proposed Medicaid cuts to nursing homes would translate to about a $125,000 reduction in payments per facility per year.

“With Florida’s growing older population, it’s critical that our nursing centers have the resources they need to recover from the pandemic, strengthen their workforce, upgrade their aging physical structures and continue implementing solutions to ensure seniors have access to high-quality long-term care,” Reed, whose association is the state’s largest nursing-home industry group, said in a statement.

Similar to the Senate proposal, which was released Wednesday, the House health-care plan recommended reducing Medicaid payments for inpatient and outpatient hospital care by $288 million.

Moreover, the House plan proposes eliminating $226 million from what the Safety Net Hospital Alliance of Florida calls the “critical care fund.” The fund is used to offer enhanced Medicaid payments to 28 hospitals that provide the largest amounts of charity care in the state, according to the industry group.

In all, the House proposed spending roughly $42.1 billion across the state’s six health care-related agencies. By contrast the Senate released a $42.3 billion proposal. The proposals are an early step that will ultimately be part of House and Senate leaders negotiating a final budget for the fiscal year that starts July 1.

Florida Hospital Association President and CEO Mary Mayhew, in a statement, called the House’s proposed reductions to hospitals “a gut punch to the doctors, nurses and health care heroes who risked their lives responding to this (COVID-19) crisis. It is simply beyond belief that during a public health emergency, some state lawmakers chose to balance the budget by cutting funding that serves the elderly, disabled and most vulnerable families in our state.”

Mayhew in her statement called on legislative leaders to “use a small portion” of $10 billion in federal COVID-19 relief money that is expected to soon flow to the state “to help Florida hospitals and the patients they serve.”

The proposed health-care budget released Wednesday by Senate Health and Human Services Appropriations Chairman Sen. Aaron Bean, R-Fernandina Beach, also calls for steep reductions to hospitals, though they would be less than what the House is seeking.

The Senate proposal would reduce hospital inpatient and outpatient Medicaid rates by $251.2 million. Also, the Senate would reduce the “critical care fund” by $77.3 million, compared to the House’s proposed $226 million reduction.

Unlike the House, the Senate proposal wouldn’t cut funding for nursing homes.

Among the similarities in the budgets, the House and Senate propose eliminating over-the-counter drug benefits for adults on Medicaid, which would lead to a $22.6 million reduction.

Both chambers also agree the state should increase Medicaid reimbursement rates for institutions that care for people with intellectual and developmental disabilities. But they don’t agree on the amount. The House has proposed increasing the rates by $12.1 million in overall funds, while the Senate has proposed a $36.6 million increase.

Jointly funded by the state and federal governments, Medicaid is a safety net program that provides health coverage to poor, elderly and disabled residents. Enrollment in Florida’s Medicaid program stands at more than 4.5 million people, an increase of more than 730,000 people in the past year since the COVID-19 pandemic hit the state.

While the House budget includes cuts for hospitals and nursing homes, it also includes funding for an initiative by Sprowls, R-Palm Harbor, to allow postpartum women to continue to receive Medicaid benefits for a full year following delivery of babies.

To fund the extension would cost nearly $240 million, the majority of which would come from federal Medicaid matching funds. But to pull down those federal Medicaid dollars, the House proposes investing nearly $93 million in state dollars. 

Reducing nursing home reimbursements by 2 percent “saves” about $31.1 million in state dollars, about one-third the amount the House needs to fund the extension for postpartum women.

In announcing his support for the extension, Sprowls said postpartum women and their babies are some of the most vulnerable people in the state.

“No matter where you go in this state, no matter what organization you are or what school or what community center, when you ask people who are our most vulnerable population, the common themes that everyone — without exception — will mention are new moms and their babies,” Sprowls said.

AARP Florida Associate State Director Zayne Smith had not analyzed both chambers’ budgets Thursday. But she told The News Service of Florida that nothing good comes from pitting one group against another.

“All groups (of Medicaid recipients) are vulnerable, quite honestly,” she said. “I don’t think you can pit one group against another. It’s a lose- lose scenario.”


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