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State budget negotiators agree to smaller shift in hospital Medicaid reimbursements funding

Lawmakers tasked with negotiating the state’s health care budget agreed late Thursday night to a smaller shift in reimbursement funding for hospitals’ Medicaid cases, meaning hospitals with the largest fractions of those cases may not face nearly as severe a reduction as initially proposed.

Senate budget writers had previously raised a plan that would have redistributed a $318 million additional fund of “automatic rate enhancements” to those hospitals into general funding for all hospitals in the state. (The state currently reimburses all hospitals for Medicaid care at a certain base rate.) But negotiators agreed to shrink that redistribution to just $9.5 million, or 3 percent of the total fund, for the upcoming budget year.

The change means that potential cuts to the state’s largest safety net hospitals, like Jackson Health in Miami-Dade or Tampa General, are unlikely to reach into the tens of millions as had been first projected.

“It means a slight reduction that hospitals can live with. Hospitals can plan. It’s not a drastic reduction,” said Sen. Aaron Bean, the joint panel’s health care budget chief. “I think the industry can live with it. Floridians are going to be well taken care of at their local hospital.”

The House had initially suggested trimming hospital Medicaid reimbursement spending by 3 percent in both inpatient and outpatient care, which would have been about $110 million. That would have meant slight cuts for every hospital across the board. But the Senate’s plan, to instead reshuffle the additional Medicaid “enhancement” payments into the base rates paid to all hospitals, would have given the majority of hospitals a small boost while dealing major cuts to the approximately two dozen hospitals that currently get the additional funds.

Proponents of the Senate plan had said bolstering the base rate funding would mean money more fairly “follows the patient.” Safety-net hospitals, which labeled the additional money a “critical care fund,” said that the money was necessary because those hospitals disproportionately handle more severe and complex cases.

Though it’s clear those hospitals will not lose as much, it’s not yet clear how much individual hospitals will gain or lose. Lawmakers are still negotiating other details related to hospitals’ Medicaid reimbursements, such as how the base rate funding is weighted to pay for more complicated, complex medical cases.

What House and Senate negotiators are also likely to agree to early is how the state will handle its policy of retroactive eligibility for Medicaid, which determines how long the program will cover past medical bills. Last year, the Legislature had approved shortening the period from three calendar months to just one calendar month, though advocates said the change could hurt seniors and those with disabilities.

Bean said the House is likely to agree to a plan to extend the policy for just one year, rather than permanently as initially suggested, and authorize a study to collect data on how the change affects patients before it is reconsidered in 2020.

Lawmakers also plan to “bump” up still unresolved differences in the budget to each chamber’s budget chief Friday, and those reimbursement details are just one of several health care issues left on the table. The chambers still have to reach agreement on some funding related to child welfare, how to fund a waitlist for caring for people with disabilities, and a proposal that would require the Agency for Persons with Disabilities to restructure its Medicaid waiver.

And though both chambers have now agreed to a mild cut to the “enhancements” fund, the fund may be trimmed further in future years, suggested Sen. Rob Bradley, who will soon take over budget negotiations with his House counterpart Rep. Travis Cummings.

“What happens in future years we're still discussing,” he said Thursday night. “We want the system to wean off [those] payments over time but those are ongoing discussions.”

The legislative session is scheduled to end by May 3. For that to happen, the chambers must reach agreement on all budget issues by Tuesday, so the budget can sit for a required 72 hours before the vote.