AIF weighs in supporting the Senate plan to implement DRG hospital funding

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The Associated Industries of Florida (AIF) weighed in on the implementation of the diagnostic-related groups (DRG) model for Medicaid payments, voicing support for the  proposal forwarded by the Senate Appropriations Committee, and suggesting that this model will allow for a more equitable, efficient process in allocating public dollars for health care.

The DRG reimbursement plan was approved by the Legislature in 2012, and would replace sets of complex formulas that currently calculate flat per-diem rates for hospital stays with payments based instead on illnesses and treatments. If this Legislature does not intervene, the changes will be implemented starting on July 1st.

Currently, the Senate and House have developed different formulas for hospital reimbursement under DRG, with public and teaching hospitals favoring the House plan in hopes of avoiding what they fear will be deep funding cuts.

To the contrary, AIF President Tom Feeney stated that the Senate proposal would remedy costly disparities in payments between public and for-profit hospitals, and pointed out that unlike public hospitals, private tax-paying hospitals have weathered repeated funding cuts over the last three years.

“Why should taxpayers have to pay more for a procedure at one hospital than another?” Feeney said in a statement. “We believe this nationally-tested model will allow for a more measurable and transparent process for all.”

Both the House and Senate plans will permit funds to be available to train more Florida physicians in graduate medical education residency programs — an important measure that will mean more Florida-trained physicians remaining in state.