HCA Healthcare
April 07, 2019

SOURCE: Tallahassee Democrat

AUTHOR: Jeffrey Schweers

A House plan to reduce Medicaid reimbursement rates could pull the plug on rural hospitals hit hardest by Hurricane Michael and already on life support.

Hospitals designated as rural or impacted by Michael in Florida Senate districts 1, 2 and 3 would lose an additional $1.8 million under the House spending proposal while Tallahassee hospitals facing a surge in patient care from communities impacted by Michael would lose an additional $1.5 million under the proposed House budget.

That’s a total loss of $3.3 million for the region’s rural hospitals and a $3.8 million hit statewide.

Rep. Loranne Ausley claps during the opening day of session for the Florida Legislature Tuesday, March 5, 2019. (Photo: Tori Schneider/Tallahassee Democrat)

What’s driving this reduction is a House proposal to cut the Medicaid base rate payments by 3 percent and cut “automatic rate enhancement” payments to hospitals by 3 percent. It's an across-the-board cut that would cost hospitals $111 million statewide on top of the $651 million in recurring cuts from last year.

“Bottom line, the cuts are across the board and will have a significant impact on safety net and rural hospitals,” Rep. Loranne Ausley, D-Tallahassee, said while she was touring the Panhandle Friday with Agriculture Commissioner Nikki Fried. “Rural hospitals are already struggling to keep their doors open, and these cuts could be the final nail in the coffin.”

The Florida Hospital Association hopes to draw attention to this disparity with a campaign called Cuts Won’t Heal. Tomorrow and Monday it will air a TV spot during the NCAA finals in North Florida.

"This is utterly shocking when you think about what these hospitals just went through," said Bruce Rueben, president of FHA. "This is the worst time to expect them to deal with higher Medicaid cuts."

Bay Medical Center had to lay off half its staff, 800 people, due to the extensive damage caused by Michael. Calhoun Liberty Hospital was damaged and stopped taking patients for overnight care, but kept its emergency bay running.

Bruce Rueben (Photo: Florida Hospital Association)

Under the Senate plan, rural Panhandle hospitals affected by Michael would gain back $1.8 million and Tallahassee area hospitals would gain back $4.1 million of the recurring Medicaid cut from 2018, for a total of $5.9 million.

Statewide, rural hospitals would see a return of $2.8 million under the Senate plan.

The Senate budget also earmarks $1.8 billion for recovery costs related to Hurricane Michael, including $3.5 million to rebuild Calhoun Liberty Hospital and $1.6 million for Doctors Memorial Hospital, Critical Rural Health Clinic.

Both budget proposals would impact Medicaid payments to hospitals for the care of low-income children, pregnant women, the elderly and disabled, Rueben said.

The Senate proposes to eliminate “automatic rate enhancement” payments and redistribute that money into the Medicaid base rate. This proposal would reduce funding to hospitals that currently receive automatic rate enhancements.

Both House and Senate leadership have offered these plans as ways to reduce healthcare costs. But Rueben said they will have the unintended consequence of pushing costs onto paying patients.

"This doesn't rein in healthcare costs, he said. "This just changes who pays for it. The unmet cost goes to insured patients in the form of rate increases."

Rural Hospitals Face Medicaid Cuts

  • Bay Medical Center: $380,150
  • Sacred Heart – Gulf: $49,430
  • Calhoun Liberty: $35,902
  • George E. Weems Memorial: $16,233
  • Doctors Memorial: $32,437
  • Jackson: $194,338
  • Madison County Memorial: $31,690
  • Jay: $31,139
  • Doctor's Memorial: $74,499
  • Healthmark Regional Medical Center: $51,535
  • Northwest Community: $88,777
  • Sacred Heart Emerald Coast: $294,271
  • Gulf Coast Regional Medical Center: $531,376