The Florida Current: Hospitals told to raise $45 million or face additional reductions to their rates
Hospitals told to raise $45 million or face additional reductions to their rates
Christine Jordan Sexton, 5/31/2011 - 9:07 PM
www.thefloridacurrent.com
Hospitals -- already facing a 12 percent reduction in their Medicaid rates in the next fiscal year -- could see deeper rate cuts in the coming months.
The state Agency for Health Care Administration on May 24 sent a letter to hospitals advising them that there is a $45 million shortfall in intergovernmental transfers -- so called IGTs used to help fund hospital Medicaid rates.
If the state cannot find “willing contributors” to shore up the deficit in seven days, the letter notes, the state will ”take actions to reduce the current hospital reimbursement rates" on June 1. Modified rates would be established for the first six months of the year according to the letter, and the “recoupment process will likely begin in the first payment cycle in July.”
Because Medicaid dollars are matched by federal funds the impact on Florida hospitals is $123 million, according to an analysis prepared by the Safety Net Hospital Alliance of Florida, an association that represents many of the large hospitals that provide indigent care.
Rep. Matt Hudson, R-Naples and chairman of the House Appropriation Health Care subcommittee, blasted AHCA for not advising the Legislature -- which adjourned earlier this month -- of the deficit in IGTs.
“It would have been nice to be told this when we were actually in session," Hudson said.
Additionally, he criticized the state for giving hospitals just seven days -- which included the weekend and Memorial Day when most people were off -- to come up with the $45 million.
“Giving people one week to come up with that amount of money is an unrealistic thing and it’s not fair to the public,” Hudson told the Florida Tribune.
Hudson said the Legislature handled the deficits in the Agency for Persons with Disabilities in a public way and they should have had a similar opportunity with the hospital rates. Additionally, Hudson said he doesn’t want to hear from the agency that it wasn’t aware of the shortfall.
“'I didn’t know' isn’t an excuse. 'I didn’t know' means I didn’t do my job well,” said Hudson.
The overall health care budget for fiscal year 2011-12 included in SB 2000 appropriates nearly $30 billion for health care and human services, or a 5 percent increase. But there are also plenty of cuts in the final budget. Hospitals will have their Medicaid reimbursement rates cut by 12 percent, county health departments’ rates will be cut 10 percent, nursing home rates will be cut by 6.5 percent and development disabled providers will receive a 3 percent rate cut. The budget also cuts money set aside for biomedical research.
SNHAF President Tony Carvalho said the reductions could be “devastating” given the fact Medicaid rates already are below hospital costs. Carvalho said his association “is working on options,” including “petitioning the Legislature and agency” to take more time before recouping any dollars from hospitals. Carvalho said there’s no requirement that the reductions be made by July 1 as AHCA has indicated.
Carvalho’s hospitals, which provide a large amount of Medicaid care, stand to lose the most money -- about $72.7 million.
Medicaid HMOs pay hospitals based on their Medicaid rates and if reductions to rates are made, arguably it could be a savings for Medicaid HMOs. But Florida Association of Health Plans President and Chief Executive Officer Michael Garner said the reductions would impact plans differently and an analysis would need to be done to see the impact. Additionally Garner stressed that not all hospital inpatient days are paid by managed care plans.
But he did note that hospitals are the “major driver” of health care costs.
“Absolutely, it will have a positive (fiscal) effect in the system,” he said.
In accordance with Senate Bill 1484 (Chapter 2010-144, Laws of Florida), Section 2, the Agency for Health Care Administration established a technical advisory panel to advise the Agency in the study and development of intergovernmental transfer distribution methods within the Medicaid program. The panel included representatives from contributing hospitals, medical schools, local governments and managed care plans.
- Click to see AHCA's IGT report from 2010-2011: http://static-lobbytools.s3.amazonaws.com/press/20110110_florida_medicaid_intergovernmental_transfer_technical_advisory_panel_report.pdf
Below . . . Reported by South Florida Hospital News in March 2007
Proposed CMS Rule Will Cut Hospital Reimbursement by More Than $4 Billion - Some Hospitals Could Close
The Florida Hospital Association (FHA) has completed an analysis of the proposed Centers for Medicare & Medicaid Services (CMS) rule governing the use of intergovernmental transfer (IGT) funds and has determined it will cost Florida's hospitals more than $4 billion over the next five years. The proposed rule, which was published on January 18, 2007, negates the policies adopted and approved by the federal government for Florida's Low Income Pool (LIP) program, Medicaid, and the care afforded by these programs.
"This proposal will have a disastrous impact on Florida's hospital community'" said Wayne NeSmith, President of the Florida Hospital Association. "We are asking the Florida Congressional Delegation to protect our state's hospitals from these cuts and the communities we serve," said NeSmith.
The analysis developed by FHA shows the annual financial impact on hospitals in Florida exceeds $932 million per year. The rule drastically changes the way Florida funds its Medicaid LIP program. The LIP program provides special Medicaid payments to hospitals based on the amount and types of services provided including pediatric, trauma, rural, and graduate medical education. "If this rule is allowed to go into effect, hospitals across the state and the country will be forced to dramatically reduce services and in some cases, hospitals will close," according to NeSmith.
FHA will continue to meet with the Florida Congressional Delegation and work closely with the American Hospital Association (AHA), the National Association of Public Hospitals (NAPH), and the Safety Net Hospital Alliance of Florida on a Congressional solution.
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