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How the Legislature could use $1.5 billion in extra Medicaid money for something other than hospitals

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@MichaelAuslen

There's $1.5 billion on the table that could shore up the state budget, but the question in Tallahassee is this: How will the Legislature be allowed to use it?

Both the House and Senate appear ready to use the Low Income Pool approved by the Trump administration last week to offset cuts to hospitals and free up money for other priorities.

"It’ll free up money from general revenue that then can be used to put into reserves to shore up out years or to pay for some of the projects that members have a unique interest," said House Appropriations Chairman Carlos Trujillo, R-Miami. "Whether it’s Lake Okeechobee in the Senate or on the House side, a lot of the K-12 priorities, Schools of Hope and Best and Brightest."

After other House leaders indicated earlier this week that taking LIP money wasn't a sure thing, Trujillo's comments Wednesday and Thursday echo remarks made last week by Sen. Anitere Flores, R-Miami, who heads the Senate's health care budget subcommittee. She said the federal government's last-minute agreement to reinstate the LIP -- which technically reimburses hospitals that care for the uninsured -- gives the Legislature more flexibilitty.

But can they do that?

It all depends on the terms the state is able to convince the federal government's Centers for Medicare and Medicaid Services to agree to.

"The devil is going to lie in the details," Trujillo said.

LIP is governed by complex rules that impact sources of funding, how much each hospital is paid out and what kinds of costs it can reimburse. That makes legislators, particularly House leaders, reluctant to count on the money.

Even in Tallahassee, where millions are spent on lawmakers' pet projects, $1.5 billion is a lot of money.

Still, House Speaker Richard Corcoran, R-Land O'Lakes, said Thursday he thinks that the new Trump administration will give Florida favorable terms. At the very least, he said, a $1.5 billion pot of money is more than the state was given in the final years of the Obama administration, which wanted to end LIP in an effort to push the state toward expanding Medicaid under the Affordable Care Act.

"My anticipation, and I think the Senate’s anticipation, is it’s a much bigger number than any of us thought was coming and in all likelihood, we will be more than capable to work with those terms and conditions to craft something that’s workable," Corcoran said.

But for hospitals, which generally praised the LIP deal as good news, that could mean they still get hit by deep cuts.

Lawmakers are signaling that they hope to move around money elsewhere in the health care budget to effectively use the $1.5 billion on priorities outside the state's safety net hospital system.

The original budget proposals included Medicaid cuts to hospitals totaling $621.8 million in the House and $258.6 million in the Senate. Most of that came from the federal government, but the state portion was being redirected to other priorities.

With LIP now a possibility, the Legislature could make deeper cuts to hospitals and use LIP to fill the holes they leave behind -- if the rules set by the federal government allow it.

Neither Corcoran nor Senate President Joe Negron, R-Stuart, has put health care funding at the centerpiece of his term in office. Instead, as Trujillo said, the money could go toward issues that are higher priority for the two chambers' leaders, like education or the environment.

"It just gives us some more money, some more flexibility in order to accomplish those goals," Trujillo said.

Photo: House Appropriations Chairman Carlos Trujillo, R-Miami, (center).

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