Obscure provision in Medicaid reform could cost Florida children’s hospitals millions

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Florida’s children’s hospitals are appealing to lawmakers to revoke an obscure provision in state law that would reduce $123 million from children’s hospital care for redistribution to other hospitals statewide.

The provision — a small part of a significant Medicaid managed care act passed in 2011 – would have the unintended consequence of slashing children’s hospital budgets.

Both the Florida Association of Children’s Hospitals and the Safety Net Hospital Alliance of Florida are calling on the Legislature to repeal the law this session — before the cuts take effect July 1.

Hospital advocates say the provision was buried in the massive bill, which was passed with little public review or commentary on the impact it would have on individual hospitals.

The law was written to change the way that Florida’s hospitals are reimbursed for care provided under the Medicaid program — referred to as “tiering” – that places every hospital within one of three tiers for reimbursements.

When approving the tiering plans as part of the broader Medicaid managed care reform, legislators had little knowledge of the impact tiering would have on children’s hospitals.

Patients in children’s hospitals traditionally have more medically complex conditions, as well as being more expensive to treat. Often, the facilities catering to children have high Medicaid caseloads, with an average of nearly two out of three kids treated in these hospitals enrolled in the program. 

After the law goes into effect, two separately licensed hospitals — Miami Children’s Hospital and All Children’s Hospital in St. Petersburg – would collectively see funding cuts of $17.6 million.

Ten other large children’s hospitals will face cuts totaling more than $100 million, which could jeopardize access to care for some of Florida’s sickest and most injured children. 

“These cuts hurt children’s access to specialized, critical children’s hospitals services in our state and jeopardize the financial viability of children’s hospitals,” said Michael Aubin, President of Wolfson Children’s Hospital in Jacksonville. “And to add insult to injury, dollars taken from our children’s hospitals will be redistributed to hospitals that simply don’t provide the same level of specialized services to families in need when their child becomes sick or injured.”

As the hospitals lose millions of dollars in funding, legislators reallocate those funds to other hospitals throughout the state, most do not provide highly specialized services, such as organ transplants, pediatric trauma care and behavioral health services.   

“There is no rational public policy basis for allowing a law to take effect that causes such harm to children’s hospital programs,” said Tony Carvalho, President of the Safety Net Hospital Alliance of Florida. “These hospitals play a critical role in the health and welfare of Florida’s children.

“We’re urging legislators to act now to protect these important programs for children, before the law triggers, and it is too late.”

Phil Ammann is a St. Petersburg-based journalist and blogger. With more than three decades of writing, editing and management experience, Phil produced material for both print and online, in addition to founding HRNewsDaily.com. His broad range includes covering news, local government and culture reviews for Patch.com, technical articles and profiles for BetterRVing Magazine and advice columns for a metaphysical website, among others. Phil has served as a contributor and production manager for SaintPetersBlog since 2013. He lives in St. Pete with his wife, visual artist Margaret Juul and can be reached at phil@floridapolitics.com and on Twitter @PhilAmmann.