Miami Herald: Senate Medicaid plan would cut funding for Jackson, safety-net hospitals

[Excerpted from the Miami Herald. Read the full story here]

TALLAHASSEE —   Miami’s Jackson Health System could see its crucial Medicaid funding cut by $46 million, or about 13 percent of what it was expecting, under a bill that is scheduled for a floor vote in the Senate by the end of the week.

Jackson isn’t the only South Florida hospital that would take a hit, according to a preliminary analysis by the Safety Net Hospital Alliance of Florida. Miami Children’s Hospital would face a $15 million cut to its anticipated Medicaid funding, the report concluded. And Memorial Healthcare System and Broward Health would each shoulder about $3 million in reductions.

All told, the state’s safety-net hospitals would lose out on an estimated $104 million, according to the analysis. For-profit hospitals, meanwhile, would benefit to the tune of about $81 million.

“This would put a tremendous roadblock in front of us,” said Carlos Migoya, CEO of Jackson Health, which would still receive about $315 million in Medicaid money. Migoya and other safety-net hospital CEOs are running out of time to make their case. The proposal will be read on the Senate floor on Wednesday, and will likely receive a vote on Thursday.

The safety-net hospitals will also have to overcome the proposal’s supporters, who say it helps end disparities between hospitals.

“Contrary to what some naysayers are saying, the for-profit hospitals have taken severe cuts over the last three years in the tens of millions of dollars, while tax district hospitals have taken little to no cuts as they have bought back their rates by utilizing taxpayer dollars,” Associated Industries of Florida President Tom Feeney said in a press release.

Legislators could soften the blow, at least in the short-term, by accepting billions in federal money to expand Medicaid under Obamacare. The conservative House opposes the expansion, which would help safety-net hospitals pay for charity care that they say drives the need for more Medicaid dollars than for-profit hospitals.

Feeney on Tuesday called on lawmakers to consider the extra Medicaid money, and pointed to a report from Moody’s Investor Services that indicated the bond rating of charity-care hospitals could be hurt without the additional Obamacare money.

Asked about the report and the federal Medicaid money the Legislature might not accept, Gov. Rick Scott said that he’s “still confident that the House and Senate understand that we’ve got to take care of taxpayers in our state. But we’ve also got to take care of people who don’t have health insurance. So I’m optimistic they’re still going to do the right thing.”

For now, however, lawmakers are focused on the funding formula.

The Senate and House are each considering different formulas for reimbursing hospitals under a new payment model known as diagnosis-related groups, or DRGs. Rather than paying hospitals based on how long patients stay, as Florida currently does, the new model would dole out money based on patient services.

The two chambers’ different approaches need to be reconciled in the coming weeks amid talks over the state’s mammoth health-care budget.

The main difference: what to do with local tax dollars that counties use to draw down for extra federal funds. The Senate plan redistributes a portion of that money statewide; the House plan allows the money to remain in the counties where it was received.

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