Florida Gov. Rick Scott will not drop his lawsuit against the federal government until the Obama administration makes a decision on the Legislature’s proposal for $2 billion in shared spending next year for hospital payments and a raise in Medicaid rates, according to a notice filed in the case this week.
Scott filed the notice Tuesday to withdraw a prior request that the U.S. District Court in Pensacola compel the Department of Health and Human Services to continue a hospital funding program that’s set to expire on June 30, leaving the state with a budget hole.
The Legislature’s budget proposal reduces the threat of immediate harm to Florida hospitals and patients, according to the legal notice. But Scott wants a decision on the state’s proposal before he withdraws the suit alleging that federal regulators are unconstitutionally coercing Florida to adopt Medicaid expansion by withholding a decision on the hospital payment program known as the Low Income Pool, or LIP.
In response to the governor’s filing, Chief U.S. District Judge M. Casey Rodgers canceled a hearing previously set for Friday, and she ordered the federal government to file a response to Scott’s legal complaint by July 8.
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Ben Wakana, HHS press secretary, said the department had no comment on Wednesday’s court order.
For the year that ends June 30, the LIP program will have provided nearly $2.1 billion in combined federal, state and local taxes to reimburse Florida hospitals for treating uninsured and under-insured patients on Medicaid, and for graduate medical education.
For the coming year, though, federal regulators reduced Florida’s LIP program to $1 billion in total — largely because the Obama administration will not allow the state to continue using the hospital reimbursement program as a substitute for Medicaid expansion.
But the Obama administration also offered Florida alternatives that would allow the state to receive additional federal funds for healthcare — either by expanding eligibility for Medicaid to nearly all low-income adults, or by increasing reimbursement rates for hospitals that accept Medicaid.
Florida’s Legislature chose the latter, adopting a budget that commits $400 million a year in recurring general revenues to increase Medicaid rates for hospitals primarily but also for some physicians.
That $400 million in state funds will draw an additional $600 million in matching federal money to bump up Medicaid rates. Another $400 million in state and local taxes combined will draw down another $600 million in federal money for hospital payments. Combined, both programs will generate about $2 billion in healthcare funding for Florida.
Florida and federal health officials continue to work toward a resolution on healthcare funding, but time is running out. Lawmakers are in the final days of a special session after disagreement over healthcare funding derailed their regular session that ended in May.
State government will be partially shut down if a new budget is not in place by July 1. House and Senate leaders said they expect lawmakers to vote on a budget this Friday.