Miami-Dade's Jackson Health System, Florida’s leading provider of healthcare for the uninsured, will be hit with another round of budget cuts next year after federal healthcare officials late Thursday stood firm on their promise to no longer fund care for people who otherwise would have health insurance if the state were to fully implement the Affordable Care Act.
Jackson officials estimate their hospital system could lose $50 million or about 20 percent of its current funding under a program known as Low Income Pool or LIP, which pays hospitals for uninsured Floridians’ healthcare. The federal Centers for Medicare and Medicaid Services, or CMS, plans to reduce LIP statewide from the current $1 billion to $608 million for the year beginning July 2016.
Ed O’Dell, a Jackson spokesman, issued a statement Friday that suggests hospital officials believe the cuts are too deep to allow for current levels of care for the indigent. The hospital system provided $362 million in free and reduced-cost care in 2013.
“Jackson continues to work with state and federal lawmakers and agencies like CMS to demonstrate why there needs to be a change in the funding formula that makes it commensurate with our levels of indigent care,” O’Dell said in the statement.
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$362 million Amount of charity care provided by Jackson Health System in 2013
The funding cut has made one thing clear for Tony Carvalho, president of the Safety Net Hospital Alliance of Florida: Jackson and other so-called safety net hospitals that care for a large majority of the state’s estimated 2.78 million uninsured residents are caught in the middle of a battle of wills.
Florida has been a staunch opponent of the health law commonly referred to as Obamacare, refusing to expand eligibility for Medicaid, the public health insurance program for low-income and disabled people, as provided for under the ACA.
Carvalho, who has been in talks with CMS officials, described the Obama administration’s position as: “We want to reimburse only those uninsured people you would expect to be uninsured after a full expansion of ACA coverage.”
Medicaid expansion would cover an estimated 567,000 uninsured low-income adults in Florida, according to a recent study from the nonprofit Kaiser Family Foundation. The Florida Legislature has refused to expand eligibility for Medicaid.
But even with Medicaid expansion, Kaiser found, an estimated one million Floridians would remain uninsured and ineligible for subsidized coverage, including undocumented immigrants and others.
Carvalho said he estimates the LIP figure needs to be $1 billion a year to cover those remaining Floridians, and he has written to CMS officials citing what he says are errors in their calculations that Florida will need $608 million in combined local tax dollars and federal money.
“My goal for the next month is to get CMS to make that amount go higher,” he said.
Beginning in 2005, the Florida Legislature cut Medicaid hospital rates for eight consecutive years. The cuts reduced hospital Medicaid payments by $1 billion.
Advocates for the uninsured say the funding cut, plus changes in the distribution of those dollars, will force local governments and hospitals such as Jackson to answer “big public policy questions,” said Miriam Harmatz, a senior health law attorney for the nonprofit Florida Legal Services.
“Are we going to cover everybody who's a county resident? I would hope yes,” Harmatz said, referring to Jackson’s mission to provide care to all Miami-Dade residents regardless of ability to pay. “Are we going to cover just primary care? Are we going to cover special disease groups? Are we going to just cover people who come in through the ER and are uninsured?”
And things could be made worse for some hospitals that have used the fund to shore up other financial losses. In the 2016-17 program, LIP money will only be allowed to compensate for unpaid care given to uninsured people who earn less than 200 percent of the federal poverty line.
With a shrunken LIP that is set to disappear altogether in June 2017, lawmakers will face big questions about how to keep safety net hospitals afloat and how to ensure that low-income Floridians have access to healthcare.
It’s the same question that blew up the 2015 legislative session and necessitated a special session on the budget this summer. And it has been complicated by the politics of Medicaid expansion. CMS, the Obama administration and the Florida Senate have pushed for expansion while the Florida House and Gov. Rick Scott fended off attempts to grow the program.
Tampa Bay Times staff writer Michael Auslen contributed to this report.