The uncertain future of Medicaid financing has received much attention during the past few weeks of the legislative session. Adding to that uncertainty is an unhealthy dose of speculation and misinformation about the Centers for Medicare & Medicaid Services (CMS) and federal reliability.
As chairman of the Florida Senate’s Health and Human Services (HHS) Appropriations Subcommittee, I want to set the record straight in regard to these federal programs and how they affect the lives of more than 1 million Floridians.
Medicaid is operated in a partnership between individual states and the federal government. In Florida, the state’s Agency for Health Care Administration, commonly referred to as AHCA, and the federal government’s Center for Medicare & Medicaid Services work together to design, fund and implement the state’s Medicaid program. Florida pays for about 42 percent of the Medicaid funds, while the federal government covers the other 58 percent. Through a combination of intergovernmental transfers and federal-state matching programs, the Medicaid program provides health insurance to more than 3 million Floridians.
Through the leadership of Gov. Rick Scott and the Legislature, Florida revamped what was widely considered a “broken system of care” by establishing Managed Care Networks. Managed Care was initiated in 2011 and is now being implemented statewide for nearly all Medicaid recipients. The idea behind managed care is to provide patients with a network of healthcare providers that are covered under the patients’ insurance. Patients who would like to see a provider outside of their network must pay a co-pay in order to reimburse that provider.
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So far, the managed-care approach is working well.
Florida’s Medicaid program is no longer considered broken, and millions of Floridians now have access to quality healthcare covered by Medicaid. It is considered an emerging success across the state.
Another component of Medicaid hospital financing is the Low Income Pool, commonly referred to as LIP. This is a supplementary funding pool for designated “safety net” hospitals, which typically provide uncompensated charity care to population centers with high rates of poverty and indigent patients. Its purpose was to recognize the higher costs incurred by hospitals that deliver care to greater than average numbers of low-income, uninsured patients. Since 2005, LIP has been funded through a combination of state and federal funding sources.
A year ago, the Center for Medicare & Medicaid Services notified our state that it intended to discontinue funding of the LIP because of concerns over the terms and conditions of the program. These are honest policy concerns related to the funding and distribution of the LIP payments. To put it in simple terms, CMS believes that hospitals are being compensated too much money for the amount of costs that they have for providing this indigent care.
Florida was notified last April that the LIP would be funded only through June 30, 2015. After that, a new program must be created by the state that provides significant reforms to the existing LIP policies in order to win approval for replacement federal funds.
The need to develop a new LIP model that the federal government approves of is the most critical question facing public health in Florida at this time. Together with the Florida Senate Health and Human Services Appropriations Subcommittee, which I chair, we have developed a model that we believe will provide more equity in terms of federal matching with the State of Florida.
This $2 billion question has undoubtedly affected the entire Health and Human Services Budget in 2015, and myself as well as the entire Florida Senate look forward to comprehensively solving this challenge that is before us with the Florida House of Representatives and Gov. Scott. I am very confident that our LIP Model, as well as other policies relating to the funding, scope and implementation in the Florida will promote success, prosperity, and most importantly a healthy life to people who previously thought the goal was unattainable.
State Sen. Rene Garcia, R-Hialeah, represents District 38 in the Florida Senate. He is chairman of the Appropriations Subcommittee on Health and Human Services.