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Feds push back, ask judge to deny Scott's request for LIP mediation

Florida's Medicaid director met in person with federal healthcare regulators on Monday to continue negotiations over the extension and redesign of a $1 billion government program that pays hospitals for treating uninsured and under-insured patients, according to a legal brief filed Tuesday in U.S. District Court in Pensacola.
Those ongoing meetings are just one of the reasons cited by a deputy assistant U.S. attorney in a filing urging a federal judge to deny Florida Gov. Rick Scott's motion to compel a mediation of state-federal negotiations over a program known as the Low Income Pool or LIP.
LIP is scheduled to end on June 30, coinciding with the close of Florida's fiscal year. Without agreement to renew the program, Florida legislators cannot craft a budget that ensures state hospitals receive funds to provide medical care for needy residents, according to the state's motion to compel mediation, which was filed on Monday -- the same day Justin Senior, Florida's Medicaid director, met with federal regulators.
Florida legislators need to pass a budget by June 20, the scheduled end of a 20-day special session called after state legislators failed to reach agreement on a budget during regular session, largely because of disagreement over Medicaid expansion. 

The state's urgency was apparent in its recent filing to compel mediation.

"Defendants [CMS] appear determined to leave the fate of the LIP program in limbo until long after that date -- presumably in an effort to coerce the state into expanding Medicaid or to punish the state for failing ultimately to do so,'' reads the legal brief filed on behalf of Florida Attorney General Pam Bondi

Federal regulators informed first Florida in April 2014 that the LIP program would not be renewed "in its present form" afterJune 30. Officials with the federal Centers for Medicare and Medicaid Services have repeatedly told Florida healthcare officials that LIP funds cannot be used to pay for medical care to low-income Floridians who would qualify for Medicaid under an expansion.

An estimated 850,000 low-income adults in Florida would qualify for Medicaid under expansion, according to the Urban Institute, a nonprofit health policy research group.
In May, CMS officials said the federal government estimated that Florida will need $1 billion next year for the LIP program for the 2015-2016 fiscal year, and $600 million for the following year, a significant reduction from this year’s total LIP funding of $2 billion.
Like all Medicaid funds, LIP is subject to a cost-sharing formula whereby the federal government pays 59 percent and the state pays 41 percent, meaning that CMS would provide about $600 million in 2015-16 and about $360 million the following year.
In April, Scott filed a lawsuit against the U.S. Department of Health and Human Services seeking relief from what Florida called coercive tactics by the federal government. Scott's lawsuit alleges that CMS is withholding approval of the LIP program in an effort to force the state to adopt Medicaid expansion.
About 10 days after filing the suit, the state filed a motion for preliminary injunction so Florida could keep LIP funding at its current level of more than $2 billion. The federal judge in the case has yet to rule on that motion.
In responding to a state's motion to compel mediation, the federal government argued that the request be denied because it asks the court to intervene on the negotiation over LIP and not on the core issue in Scott's lawsuit alleging coercion.
Government attorneys also argue that mediation is more likely to delay than to expedite a final agreement between CMS and Florida on LIP.
Jackie Schutz, a spokeswoman for Scott, issued a statement Tuesday accusing the Obama administration of delaying approval of a final agreement for LIP. "The state is continuing to request this issue be immediately resolved by any means possible,'' Schutz said in the statement.
The court has not yet ruled on any of the state's motions in the case. The first hearing for oral arguments is scheduled for Friday, June 19 at the U.S. District Court in Pensacola.