Paying for 'Low Income Pool' at center of Medicaid talks

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Federal officials could be close to approving a continuation of Florida’s Medicaid managed-care pilot program, but some hospitals are balking at new requirements that could cost them millions of dollars, reports Jim Saunders of the News Service of Florida.

The requirements center on part of the pilot known as the Low Income Pool, which funnels $1 billion a year to hospitals and other health providers that serve large numbers of poor and uninsured patients.

As part of continuing the pilot, the federal government would require that Florida carve out $50 million of the $1 billion for new or stepped-up programs aimed at improving the quality of care for low-income people. Federal officials also would place similar requirements on 15 hospitals that receive the most Low Income Pool money.

Phil Williams, a top Florida Medicaid finance official, said Tuesday that the federal government has made clear it plans to include the requirements in any continuation of the pilot program.

“What we’re hearing, I would interpret as a final ruling,” Williams told members of the Low Income Pool Council, an advisory group that works on so-called “LIP” issues.

But setting aside $50 million for the new or enhanced programs likely would divert money that hospitals otherwise use for expenses such as inpatient care. Also, hospitals contend they have already started such programs, including efforts to improve primary care for patients.

LIP Council member John Benz, senior vice president of Memorial Healthcare System in Broward County, said he has contacted U.S. Reps. Debbie Wasserman Schultz and Allen West to intervene with federal Medicaid officials on the issue.

Deanna Schaeffer, an official with Halifax Community Health System in Volusia County, indicated she would take a similar step with members of Congress. She described the proposed federal requirements as an “unfunded mandate.”

But in a draft document that includes the proposed conditions, the federal government signaled that it views patient-care improvements as a key part of the LIP program.

“The LIP provides government support for the safety net providers that furnish uncompensated care to the Medicaid, underinsured and uninsured populations,” the draft says. “The LIP is also designed to establish new, or enhance existing, innovative programs that meaningfully enhance the quality of care and the health of low income populations.”

The pilot program, which began in 2006, has long been controversial because it requires most Medicaid beneficiaries in Broward, Duval, Clay, Nassau and Baker counties to enroll in managed-care plans. The pilot was scheduled to expire June 30, but Florida has received a series of temporary extensions amid negotiations with the federal government about continuing it through June 2014.

The latest temporary extension is scheduled to end Thursday, but state Medicaid director Justin Senior told a House committee last week that negotiations were close to being finished. Senior said it was possible the federal Centers for Medicare & Medicaid Services would grant approval, effective Friday, of continuing the pilot through June 2014.

Williams, an assistant deputy secretary at the state Agency for Health Care Administration, said Tuesday he did not know whether such an approval would come this week. The federal government effectively has final say on such pilot programs because the state is seeking a “waiver” of parts of federal Medicaid law.

The possibility of more conditions on LIP funding comes as hospital-industry officials also worry about deep cuts in other Medicaid-related payments. Gov. Rick Scott last week proposed a budget that would slash Medicaid rates for hospitals as a way to help fund education programs.

Some hospital-industry officials have complained repeatedly in recent weeks about the potential LIP conditions.

Currently, the state spends about $80 million a year of the LIP money on expenses other than basic hospital costs like inpatient care. As an example, $34 million goes to an effort to improve primary care that has been championed by Senate President Mike Haridopolos.

The $50 million would be in addition to that $80 million. Also, the 15 hospitals that receive the most LIP money would be required to use new or enhanced programs to improve quality of care — or risk the possibility of losing 3.5 percent of their LIP money if they don’t comply.

That requirement would particularly hit hospitals that serve large numbers of low-income patients across the state. Among the hospitals: Jackson Memorial Hospital in Miami, Broward General Medical Center, Shands Jacksonville, Halifax Health in Daytona Beach, Tampa General Hospital and Lee Memorial Hospital in Fort Myers.

Peter Schorsch is the President of Extensive Enterprises and is the publisher of some of Florida’s most influential new media websites, including SaintPetersBlog.com, FloridaPolitics.com, ContextFlorida.com, and Sunburn, the morning read of what’s hot in Florida politics. SaintPetersBlog has for three years running been ranked by the Washington Post as the best state-based blog in Florida. In addition to his publishing efforts, Peter is a political consultant to several of the state’s largest governmental affairs and public relations firms. Peter lives in St. Petersburg with his wife, Michelle, and their daughter, Ella.