Gov. Rick Scott is pitching a new idea to help Florida hospitals handle the potential loss of federal funds for treating indigent patients: profit sharing.
“This would be similar to how large market baseball teams share revenues with small market baseball teams,” the Republican governor wrote in a letter sent Friday to hospital executives. “With the hospital industry’s record-high profits, it does not make sense for the hospital industry to ask state taxpayers to back fill funding the Obama Administration has elected to terminate.”
Scott’s suggestion comes at a time when lawmakers are in a stalemate over the budget and how to fund growing healthcare costs. A special session to resolve their differences and finalize a state budget is scheduled for next month.
Federal health officials have said they will not renew a $2.2 billion federal-state program that reimburses Florida hospitals for charity care. The state proposed a successor to the so-called Low Income Pool, or LIP, but has yet to hear back from the feds.
A spokeswoman for the Florida Hospital Association said her organization was reviewing Scott’s letter and had no immediate comment. Jackson Health System in Miami, which faces a shortfall of more than $200 million if LIP funding is not renewed, had no immediate comment on the governor’s proposal.
In his letter, Scott suggested that the federal government was unlikely to continue the funding, and said state lawmakers should “begin preparing a state budget without any LIP funds from the federal government.”
Scott also cast doubt on the viability of a Senate plan to funnel $2.8 billion in federal Medicaid expansion money into a new state-run marketplace for private health insurance.
“It is important to note [the U.S. Department of Health and Human Services] has made clear they will not approve any work requirements for Medicaid as included in the bill sponsored by Sen. [Aaron] Bean,” Scott wrote.
Given those circumstances, Scott asked the hospitals to brainstorm at least three ideas for sharing their collective $3.7 billion in profits to help the state “transition from being dependent on federal LIP funding.”
He plans to review the proposals when his new Commission on Healthcare and Hospital Funding meets for the first time on May 26.
Scott convened the commission earlier this week to explore how hospitals use public dollars.
So far, no members have been appointed.
Lawmakers are scheduled to return to Tallahassee on June 1 for a special session focused on the budget. The House and Senate were unable to agree on a budget during the regular session because of an ideological clash over Medicaid expansion.
They have until the fiscal year ends on June 30 to reach consensus.
Scott, a former CEO of a hospital chain, does not support Medicaid expansion. He also does not believe state money should be used to help the hospitals that receive LIP funding. For the last few weeks, he has been driving a conversation about hospital profitability.
Last month, Scott shared with senators a list of facilities from the Florida Agency for Health Care Administration that showed revenue and operating margins for 252 different medical centers in the state.
Of 239 hospitals that treat Medicaid patients, 126 of them anticipated receiving LIP funding, according to the AHCA. About half were in the black, according to Scott’s list.