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Teaching hospitals losers, for-profits winners, under Rick Scott’s alternative LIP proposal

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The state’s largest teaching hospitals would see a $200 million reduction in Medicaid payments under a proposal Gov. Rick Scott has floated to the federal government in hopes of keeping Florida’s supplemental Medicaid funds at a full $2 billion.

Conversely, the for-profit facilities would gain the most under the proposal being advanced by Scott, the former chief executive officer of the nation’s largest hospital chain.

According to spreadsheets distributed by the governor’s office, Scott’s reworked spending formula would mean deep reductions in the largest teaching facilities, including an $84.7 million reduction in supplemental Medicaid funds to Jackson Memorial Hospital,  the largest contributor of intergovernmental transfers that fund the Low Income Pool program.

Shands Gainesville would take a $34.5 million reduction under the plan and its sister hospital, Shands Jacksonville Medical Center, would see a near $36.6 million reduction in Low Income Pool funds. According to the governor’s spreadsheets, the facility had a $2.5 million profit.

Though the reduction in LIP would far exceed the hospital’s profits, the governor’s spokesperson, Jackie Schutz, said Scott does not support the closure of the hosital.

Safety Net Hospital Alliance of Florida spokesperson Ron Bartlett said the group is analyzing the governor’s spreadsheets and would have further comment on Friday. The association, which represents 14 hospital systems, has been working on its own analysis of the proposal and how the facilities fare under the proposed new LIP plan.

The group also has objected several times to how the governor is defining “profits,” noting that Scott is using the total  margin, which includes revenues from investments, and not the operating margin to show a hospital’s profitability.

Broward General Hospital would see a substantial hit to its LIP funding, losing $22.3 million. Like Shands Jacksonville’s, Broward’s loss in LIP  would exceed its profitability, according to the governor’s office.

While teaching hospitals are the losers under Scott’s revamped LIP proposal, for-profit HCA facilities are some of the winners. The biggest winner is South Miami Hospital, which would gain an additional $7 million. Memorial Medical Center would see an additional $6.6 million in LIP, Columbia Kendall Medical Center would gain $5.4 million, Orange Park Medical Center would gain $5.4 million and Aventura Hopsital & Medical Center would see an additional $4.7 million in LIP funding. Baptist Medical Center would gain $4.4 million.

Florida was advised last week that it tentatively could expect a $1 billion Low Income Pool program for the 2015-16 year and a $600,000 LIP program for the following year. Deputy Medicaid Director Justin Senior sent a letter to HHS advising that the press misreported the information, though, and the state could receive a $2 billion-plus program.

The governor wants to use $1 billion in county dollars and match it with federal Medicaid dollars. He then wants to take the entire $2 billion in money and infuse it into capitation rates for HMOs.

Ben Wakana, press secretary for the Department of Health & Human Services, said the government has gotten Senior’s letter and is reviewing it.

The Department of Health and Human Services has advised that the $1 billion figure is not incorrect. Scott has pushed to keep the LIP program at current funding levels, which would enable him to keep his promises to cut taxes and increasing education funding intact.

The federal government in correspondence with Florida told Scott that the $2 billion-plus figure the state was pursuing was too large.

Scott filed a lawsuit against the federal government in federal court in Pensacola and requested an injunction that, if granted, legal pleadings showed, would essentially force the federal government to keep LIP funding at current levels.


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