Health Care

Wary of Medicaid overcharging, Gov. Scott orders hospital audits

Florida Gov. Rick Scott has ordered state regulators to audit the business contracts of 129 hospitals to ensure they do not over charge for Medicaid.
Florida Gov. Rick Scott has ordered state regulators to audit the business contracts of 129 hospitals to ensure they do not over charge for Medicaid. AP

Playing hardball with Florida hospitals over their rising profits and growing reliance on government funding, Gov. Rick Scott on Monday revealed that he has ordered state regulators to audit 129 hospitals to ensure they are not overcharging for patients who have Medicaid, the public health insurance program for low-income people.

Scott’s office disclosed the number of audits — some of which are under way, others pending, and still more to be conducted at random — in a letter from the governor to Florida Attorney General Pam Bondi. Scott first ordered the audits on Aug. 3, two days after a state-imposed deadline for hospitals and health plans to certify that their business contracts did not exceed the statutory limit.

Earlier this month, state regulators announced audits for 31 hospitals. It is unclear from Scott’s letter to Bondi why more hospitals were added, but the performing the audits will be a challenge. Scott reduced funding for the state’s Agency for Health Care Administration, which will conduct the audits, by $64 million and about 80 positions this year.

“These agreements may ultimately result in overcharging the state for Medicaid and other healthcare services; and in some instances, could constitute Medicaid fraud and even deceptive and unfair trade practices,” Scott wrote in the letter.

State law caps the rates that hospitals can charge the private insurers that manage Florida’s Medicaid program. An estimated 3.5 million Floridians receive Medicaid through health maintenance organizations, or HMOs, under a program begun in 2006 and rolled out statewide in 2014.

But Medicaid HMOs reported steep financial losses after the roll out, and they asked the state for a mid-year pay increase of $400 million, and a 12 percent overall increase in their rates for next year. That led Florida healthcare regulators to raise concerns that the managed care plans may be paying hospitals too much.

In the letter to Bondi, Scott identified a group of 129 Florida hospitals, including some of the largest healthcare systems in the state, that will be audited for one of three reasons: they failed to certify their contracts; they submitted the requested financial information after the deadline; or their responses merit further scrutiny. All Florida hospitals will also be subject to random audits.

Among the large South Florida hospital systems targeted for an audit, according to Scott’s letter, are Baptist Health South Florida, a nonprofit with hospitals in Miami-Dade and Monroe counties, and Memorial Healthcare System, the public hospital network for South Broward.

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