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Safety net hospitals scrambling to prevent $65 million Sott veto

Gov. Rick Scott may veto $65 million in hospital Medicaid funding, although safety net hospitals are mustering all their resources in order to change his mind.

The money is related to the state's transition to a new formula for paying hospitals for Medicaid, one that depends on services provided to patients instead of how long they are in a particular hospital's care. The Legislature provided the extra funding to help reduce the losses over 40 hospitals faced under the new formula, with safety nets among the worst hit.

That extra money was not a part of Scott's initial budget proposal, but the House insisted on it and the Senate agreed. If Scott vetoes it, Miami's Jackson Memorial hospital would lose the most cash: $23.3 million.

Shands Teaching Hospital in Gainesville would lose $11 million and Tampa General Hospital would see its funding slashed by $2 million. A range of rural and specialty hospitals would also lose funding, such as a $1 million loss for Moffitt Cancer Center in Tampa.

Scott's office is still finalizing his veto list, and the governor has until May 24 to sign the budget and announce the funding he eliminated. His office wouldn't say if DRG funding will be on the list.

"We are reviewing the matter, along with the entire budget," spokeswoman Jackie Schutz said.

Rep. Matt Hudson, R-Naples, and the House's health care budget chief, fought for that money to be included in the budget and said the governor's office hasn't told him it's in jeopardy. The money includes $27 million from the general fund and another $38 million in federal dollars.

"I hope they would recognize the importance of that funding," Hudson said, pointing out that hospitals have shouldered several years of Medicaid cuts and are facing other budget uncertainties.

The Legislature could have changed the formula to shift more funding to hospitals that served the neediest patients or those located in urban areas with higher costs. Instead, lawmakers agreed to add the extra funding to help any hospitals that lost money under DRG.

According to those who have spoken with members of the governor's staff, Scott was never a fan of adding money to aid the transition to the new payment system, called diagnosis-related groups or DRG. Scott believes that hospitals should work to become more efficient under the new system and the state should not help the losers or penalize the winners, mostly for-profit hospitals.

Since learning on Monday that Scott was considering a veto of the transition dollars, hospitals have been working overtime to change that course.

The DRG formula and transition funding is located in budget language and a separate implementing bill, instead of as a single line item that Scott could veto. Depending if and how Scott vetoes the DRG funding, it could be open to challenges.

Similar questions have been raised about another potential Scott veto: tuition increases. The state's universities, colleges and workforce education programs probably would not challenge Scott if he vetoes their 3 percent tuition increase.

Hospitals, however, may not be so willing to accept a gubernatorial veto of their funding.