Hospitals that serve Florida’s neediest patients concerned about proposed change to Medicaid payments

Hospitals that serve Florida’s neediest patients stand to lose the most under a new system for how the state doles out Medicaid dollars.

The DRG payment model — or "diagnosis-related group" — would categorize Medicaid patients based on the type and severity of illness and pay hospitals accordingly. Currently, hospitals are paid various daily rates based on actual costs.

Dozens of hospitals stand to receive more Medicaid dollars under DRG, but representatives of the state’s 15 "safety net" hospitals say their facilities are among the biggest losers. That includes Miami’s Jackson Memorial Hospital and Tampa General Hospital.

Advocates say the model should be tweaked so that these hospitals, which serve the state’s poorest and most severely injured patients and are often the training ground for future doctors, are held harmless.

The state Agency for Health Care Administration has run the numbers showing what each hospital could receive under DRG compared to the status quo in the 2013-2014 fiscal year.

Jackson Memorial would drop from $345.6 million to $301.2 million. Tampa General Hospital’s payment would decrease from $139.5 million to $128.2 million.

Even though the model was tweaked in a way that benefits the state’s two freestanding children’s hospitals, All Children’s in St. Petersburg and Miami Children’s would lose $9 million and $1.4 million respectively.

None of the 13 hospitals that draw from Medicaid the most — those in line for more than $50 million annually — stand to see increases under DRG. Ten of these are "safety nets" and all but one is not-for-profit.

On the other hand, most of the hospitals that see the biggest increases under DRG are operated by for-profit companies.

Last month, AHCA sent the plan for moving to the DRG system to Gov. Rick Scott, House Speaker Will Weatherford and Senate President Don Gaetz. That means any changes would have to happen during the legislative session starting March 5 because the state hopes to launch in July.

Jim Zingale, who works for the Safety Net Hospital Alliance of Florida, said hospitals won’t just be lobbying lawmakers.

"You have to sit there and get the message out to the public, ’Do you want services to children to be cut in five months?’ " he said Tuesday after AHCA held a final public meeting on the recommendations. "This isn’t down the road, six years. This is in five months."

The DRG model is similar to how the federal government reimburses health care providers under the Medicare program for the elderly. Converting Medicaid to DRG and standardizing how hospitals are paid will make them more efficient and improve quality while protecting tax dollars, AHCA said.

Eight hospitals owned by HCA, the hospital chain co-founded by Scott, could see their Medicaid payments increase by 32 percent or more and by at least $1 million. Aventura Hospital could rise from $4.6 million to $7.1 million. Hudson’s Bayonet Point Hospital, another HCA affiliate, could increase from $3 million to 4.1 million.

In a statement released through AHCA on Tuesday, HCA East Florida Division President Michael Joseph lent his support to the DRG model.

"We believe that the movement away from a per diem system and to the DRG system is a progressive step for Florida," Joseph said. "It assures a consistent and predictable payment system for all providers in the Medicaid program, and will result in a more equitable and cost effective approach to reimbursing hospitals for inpatient care."

But the "safety nets" disagree. Zingale believes the state should have a test period where it uses actual 2013-2014 data, and not simulation models, to compare what hospitals would receive under the new system compared to the old. Then, the state can determine whether it needs to alter the DRG base rate to accommodate different types of hospitals.

Medicaid is a health care program for the poor that is administered by the state but funded mostly by the federal government. Florida has 3.3 million people currently on Medicaid, but that number could increase greatly in 2014 if the state allows 1.6 million more people to enroll as part of the federal health care law.