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Panel echoes governor's call to overhaul Medicaid reimbursement system

A panel created by Gov. Rick Scott to analyze the state's taxpayer-funded hospital districts is echoing the governor's call for changes to how hospitals are reimbursed through Medicaid.

In his 2012-2013 budget recommendation, Scott asked legislators to impose new caps on how much the state pays to treat patients covered by the Medicaid program. He argued that there was too much variation in the cost of delivering the same services at different hospitals, and he advocated for a new flat-rate system. However, hospitals have long complained that Medicaid reimbursement rates are already too low and don't fully cover actual costs.

In its 30-page draft report approved today, the Florida Commission on Review of Taxpayer Funded Hospital Districts said the state should develop a new system that makes reimbursement rates more uniform.

Commission Chairman Dominic Calabro, president and CEO of Florida TaxWatch, said a public hospital in Miami-Dade County that delivers a healthy baby should be reimbursed at the same rate as a private hospital in the same county. The old way of reimbursing hospitals based on how much they say it cost them to provide the service puts the emphasis on money, not quality, Calabro said.

"You lose focus," Calabro said about the current system. "You don't have the same degree of cost effectiveness."

The final report due to the governor's office by Jan. 1 will also be sent to Senate President Mike Haridopolos and House Speaker Dean Cannon. Legislators may be asked to take action on some of the recommendations during the upcoming session.

Sixteen of the 23 recommendations fall under six areas: quality of care, cost of care, access to care for the poor, oversight and accountability, physician employment and changes of ownership and governance.

But the report begins with seven general recommendations that address some of the conflict of interest and oversight concerns that the state's special hospital districts have faced. For example, it recommends separating taxing-district boards from public hospital boards. The report also suggests that instead of focusing on operating or owning hospitals, special hospital districts should become "indigent health care districts" that fund programs and services for the needy.

The nine-member commission has met 14 times since May. Commissioner Brad Dinkins, an Ocala developer, said there was initially disagreement between those who, like him, wanted a more free-market approach and others who championed the public hospitals. The final report shows they were able to come up with a list of recommendations that everyone supports and agrees with, Dinkins said.

Here is a link to the Draft Report.