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Amid budget tug o’ war Rick Scott pushes new hospital funding proposal with no general revenue

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Days after being advised that it could tentatively expect $1 billion in supplemental Medicaid funds, the administration of Gov. Rick Scott pushed for more than double that.

Deputy Secretary for Medicaid Justin Senior sent a letter to Department of Health and Human Services Director Victoria Wachino to use $1 billion in local funds to match federal dollars to drive up hospital rates by $2.27 billion, all funded with so-called Low Income Pool funds.

Senior said the fund would be put into increasing Medicaid managed-care capitation rates that, in turn, would better pay the hospitals.

“This means there is no need to infuse additional state general revenue to maintain current Medicaid hospital funding levels (next fiscal year),” the letter reads.

Senate President Andy Gardiner issued a release advising that the plan–which would incentivize matching dollars–does not forward CMS’ principles. The Senate president also advised that the proposal is short-sighted because it pushes off hospital financing problems for another year. The LIP dollars are not recurring.

“Any proposed spending plan should be a multi-year plan that establishes a foundation for comprehensive solutions,” Gardiner said in a release, noting that LIP funding will decrease from $1 billion in the upcoming year to $600 million in fiscal year 2016-17.

Senior’s boss is Scott, who opposes a Medicaid expansion with Obamacare funding. Scott this year pushed more than $600 million in tax cuts and a big boost in education funding. Any use of general revenue to supplant LIP losses would come at the cost of those priorities.

The no-general-revenue-necessary announcement came, ironically, on the heels of Gardiner’s comments that there appeared to be agreement between the chambers that additional general revenue dollars would be needed in health care because of the loss of Low Income Pool dollars.

The federal government advised Florida last week that it could tentatively receive approval for a $1 billion Low Income Pool program for the 2015-16 year and $600 million for the 2016-17 year. The lengthy letter includes a section where the federal government advises Florida of additional options in which Florida can bring in additional federal funding to finance health care.

The letter notes that Florida could draw down an additional $1.8 billion in federal dollars if it used local government matching money to increase Medicaid rates. The letter notes the state could accomplish that using existing state and local contributions “over and above” the funds necessary for a $1 billion 2015-16 LIP program.

It was one of several ideas CMS floated to Florida to increase federal dollars to the state, including a Medicaid expansion that could pump additional Medicaid dollars into the state or infuse general revenue into its hospital rates, as proposed by the House of Representatives in an offer to the Florida Senate.

Senior does note in his letter to Wachino that there may be a $54 million hit to medical education programs as a result of the proposal. Senior asks that Wachino advise him of the proposal. Additionally, Senior says he wants to discuss getting answers to a series of questions Scott asked the federal government regarding “federal healthcare coverage and access options.”budget Proposal 2015

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