Governor’s Budget Recommendations Targets Hospitals, Medicaid

By Christine Jordan Sexton

Gov. Rick Scott, who made a name for himself by leading one of the nation’s largest hospital chains, is targeting Medicaid and health care spending as part of his $66.4 billion budget request.

Scott proposes cutting overall state spending by 4.6 percent, but a large chunk of the savings — nearly $1.8 billion — would come from Medicaid. And most of that is coming by changing how Medicaid reimburses hospitals.

Scott wants to create a new system of reimbursement rates for hospitals — which would group them according to certain categories — and pay those hospitals identical rates.

The governor said he was pushing for the changes as a way to rein in Medicaid costs, but he also said the current reimbursement formula for hospitals was “unfair” and “illogical” and he noted that some hospitals in the same region were getting paid vastly different rates.

But Scott, who led Columbia/HCA back in the ’90s, only targeted hospital in reductions to Medicaid rates. He left intact reimbursement rates for other providers, including nursing homes.

“We are glad to see the governor recognized nursing homes have withstood as many cuts they are able to withstand,” said Tony Marshall, a Florida Health Care Association lobbyist and Medicaid funding expert.

Scott’s move to go after Medicaid comes even though the state has asked the federal government for a waiver for a massive overhaul of the Medicaid program that would take effect in 2014.

He said that in order to help create funding for education the state needs to cut spending in Medicaid now.

The governor’s proposal quickly drew a sharp response from the state’s hospital association.

Florida Hospital Association President Bruce Rueben said the proposal would either force hospitals to cut services or increase the costs they charge commercially insured patients, a practice known as cost shifting, which could increase annual premiums as well as out-of-pocket costs.

“It’s not realistic to expect hospitals can sustain those cuts in Medicaid payments,” Rueben said.

Although the hospitals were anticipating the governor to make the proposed cuts to Medicaid reimbursements, Rueben said his group didn’t foresee such a proposal: “It exceeds what any reasonable person could have anticipated. It’s not reasonable.”

Rep. Matt Hudson, the Naples Republican  who is in charge of  the House Health Care Appropriations Subcommittee, said he had not seen the budget and wasn’t able to comment on specifics.

When told of the plan, however, to make hospital reimbursements more consistent Hudson said this: “Florida couldn’t be any more different from top to toe.”

Senate President Mike Haridopolos told The Florida Current on Tuesday that he supported making Medicaid reimbursement rates for hospitals more consistent. “What we want to try to do more than anything else with hospitals is to have a consistent reimbursement rate,” he said.

The plan to change reimbursement rates would require federal approval.

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