TALLAHASSEE — Florida counties stand to lose nearly $300 million in state revenue over the next few years, a punishment of sorts for what the state says are unpaid Medicaid bills.
But counties say much of what the state categorizes as delinquent bills are actually erroneous charges created by a faulty state billing system, and that the state's decision to collect is masking a ploy to shift additional costs to local governments.
Led by the Florida Association of Counties, local officials are begging legislators for a fix as House-Senate budget negotiations commence.
Under the controversial proposal, the state would withhold revenue sharing dollars from counties equal to a portion of the delinquent bills as well as any future payments counties owe under the Medicaid program. Currently, counties are allowed to dispute the amounts they owe and pay what they think is fair.
Miami-Dade could lose an estimated $31 million in revenue sharing in the upcoming fiscal year with the new system and Pinellas could see an $8.6 million decrease, according to the Association of Counties.
The proposed change would strip the ability of counties to dispute claims before the state withholds their revenue, Pinellas County Commissioner Susan Latvala said.
Calling the new process an "unfair, unfunded mandate," Latvala noted that the policy shift comes on top of a proposal to require counties to pay a bigger share of overall Medicaid costs.
"(The state doesn't) want to raise taxes so it will force local governments to raise taxes," she said.
Medicaid — which provides health care services for about 3.2 million Floridians, including many children — is administered by the state using a combination of county, state and federal funds.
Counties say the state's billing process is flawed.
During the 2011 fiscal year, the state billed Hillsborough County $27.8 million for Medicaid costs, a 70 percent increase from the previous year, the county said. But Hillsborough disputed $12.8 million of the amount, including a $2.8 million HMO bill it says the state sent over twice.
Orange County, meanwhile, audited its Medicaid claims and found that the state demanded payment for services even though no money was due, sent duplicate bills and didn't have paperwork to verify that recipients lived in Orange County.
The Agency for Health Care Administration oversees the Medicaid program and runs the billing system at the center of the dispute. But the idea of withholding revenue sharing from counties was first discussed on Feb. 10 at a meeting of state economists and tax experts. The new system would reduce the backlog owed to the state and ensure future timely payments of Medicaid costs, according to minutes from the meeting.
Those suggestions eventually were folded into the conforming language of the Senate's 2012-13 budget (now known as HB 5301).
Sen. Don Gaetz, R-Niceville, has suggested the state withhold only 85 percent of the money the state believes it is owed as part of a compromise. If counties think the system is so faulty that more than 15 percent of the bills are inaccurate, they should sue, Gaetz said.
In Pinellas, Latvala said local lawmakers are focused on trying to get the law changed during the budget process and haven't discussed whether they would challenge the decision in court. County officials are hoping for additional concessions before the state budget is finalized.
"We have to go back and explain to our taxpayers a $7 million increase in costs for things we don't even believe are verifiable or justifiable," said Gretchen Harkins, Broward County director of intergovernmental affairs.