Safety net hospitals win delay on costly funding law

04/23/2014 4:45 PM

04/23/2014 5:46 PM

Safety net hospitals will get a one-year reprieve from a controversial funding formula that they said would cost them hundreds of millions of dollars.

The so-called “tiering” law would have required counties that use local dollars to attract federal matching funds for hospitals to share that money with counties that don’t raise local funds for healthcare. Jackson Health System in Miami was bracing for a $140 million cut as a result of the new law. Tampa General Hospital said its loss would have been $43 million. Miami Children’s Hospital and All Children’s Hospital in St. Petersburg estimated they would together lose $18 million.

The Legislature’s two health care budget chiefs — Rep. Matt Hudson, R-Naples, and Sen. Denise Grimsley, R-Sebring — agreed Wednesday that the tiering law should be delayed.

In the next year, the state should have time to complete privatizing the Medicaid system, which proponents hope will save money. The federal government also gave Florida a March 2015 deadline to complete a study on how it pays for Medicaid and better ensure that money gets to where it is most needed.

“We don’t know what happens next year so the best thing to do is maintain the status quo,” Grimsley said. “When we come back in session next year, we will then have a better idea of what direction we need to go.”

The news came as a relief to safety-net hospitals worried about losing even more money at a time when other changes in state law have affected the Medicaid program — and the state has refused $51 billion over three years to expand eligibility for the program.

When the tiering law was first passed in 2011 as part of a major bill to change how Medicaid is administered, it was seen as a way to stretch available dollars. But as time drew near to implement the tiering plan, lawmakers from the state’s most populated counties started to apply the brakes.

Especially now, tiering would have been one blow too many, said Amy Maguire, vice president for government and corporate relations at All Children’s. “We’re able to serve so many kids because of our partnership with the (Juvenile Welfare Board) and the local dollars it provides,” she said.

Jackson Health System CEO Carlos Migoya said he was pleased about “at least having the delay.” “We would have been more excited about a repeal,” Migoya said. “But the delay will help.”

Phillis Oeters, who oversees government relations for Baptist Health South Florida, said she, too, was relieved about the delay.

“The Legislature chose the right course for the state, particularly with all of the other hits hospitals have taken at a state and federal level,” she said.

Oeters said the action would save Homestead Hospital from $6.6 million in cuts. The hospital serves a low-income population and has the second busiest emergency room in Miami-Dade County, she added.

Miami-Dade lawmakers made funding for Jackson their top priority this year.

“A postponement of tiering is a huge win for our county and for those that count on Jackson's delivery of vital health care services,” Miami-Dade Delegation Vice Chairman José Félix Díaz said.

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