For anyone still unconvinced that Governor Rick Scott knows the negotiation dance and uses it to the benefit of his priorities, look no farther than the most recent developments in hospital Medicaid funding.
During the 2013 session, the Legislature directed $65 toward easing the transition for hospitals into the diagnosis-related groups (DRG) payment system which reimburses hospitals based on the services they provide and the complexity of a patient’s care rather than through a daily rate. The House insisted on offering transition dollars to give hospitals time to adjust to the methodology and joint budget writers compromised at $65 million.
Scott’s original plan was to reject these transition dollars — or at least he wanted hospitals to think as such — with the belief that the formula should not consider winners or losers and that hospitals should instead work to become more efficient under the new system.
With a the threat of veto looming, hospitals — particularly safety nets — ramped up their lobbying efforts. Scott countered: if the transition funds are left alone this year, hospitals must pledge to back off next year. ย
About 20 hospitals set letters to Scott promising to forgo transition dollars and “request elimination of the recurring appropriation” in 2014 if he approves the current funds.
Such bargains may be unusual, but in this case, not a hard decision for certain hospitals to make.
Starting at the end of 2014, Florida’s Medicaid program will likely transition to statewide managed care in which HMOs will be responsible for paying hospitals, instead of direct reimbursement from the state.
Despite speculation about whether this managed care switch will occur on time, Scott’s bargain was a no-brainer for some hospitals. Jackson Health would have lost out on $23.3 million (representing 36 percent of total transition dollars) if Scott vetoed the 2013 funds.ย Likewise, Shands Teaching Hospital and Shands Jacksonville Medical Center would have collectively lost $14.5 million. ย
Meanwhile, universities might regret they hadn’t offered up such a deal themselves, as Scott’s veto of their desired tuition hike is imminent.
