TALLAHASSEE — Gov. Rick Scott's proposal to pay less to hospitals to control spiraling Medicaid costs drew skepticism from some lawmakers and hostility from hospitals Thursday.
Scott's plan is central to his $66 billion budget proposal, and ensures that his own history as CEO of a for-profit hospital chain that paid a record $1.7 billion in fines for Medicare fraud would attract new attention.
Explaining Scott's plan to legislators, senior aides touted the governor's background as having built Columbia/HCA into the nation's biggest and most profitable hospital network.
"The governor operated 343 hospitals," Scott budget director Jerry McDaniel told the Senate Budget Committee. "He was very successful at it. He said his best paying clients were Medicaid and Medicare. He loved serving those populations. He was able to make a lot of money doing that. But unfortunately, the payer on this end is the taxpayer."
Scott wants to boost public school spending by $1 billion next year and the only way to do that in a sputtering economy without raising taxes is to cut other programs. One of the biggest is Medicaid, a state-federal health care program for low-income adults and children that covers 2 million Floridians.
Scott says he can cut Medicaid costs by nearly $2 billion by paying many hospitals less to treat Medicaid patients than they get now. He says rates vary widely and illogically around the state for the same services.
The change would require approval by the Legislature and federal government, and close scrutiny of Scott's plan began Thursday in the Senate.
The biggest losers would be hospitals in urban areas or that specialize in treating children, such as Jackson Memorial Hospital in Miami and All Children's Hospital in St. Petersburg, according to an analysis by a hospital lobbying group.
Jackson, the hospital with the largest Medicaid population in Florida, would lose $133.5 million, according to the Safety Net Hospital Alliance of Florida, a lobbying group for 15 of the state's largest hospitals.
All Children's would lose $39 million and Tampa General would lose $32.5 million. Miami Children's Hospital would lose $34 million.
After Jackson, the biggest overall loser would be Shands Gainesville at $52 million. The teaching hospital, affiliated with the University of Florida, has long had strong political support from Tallahassee lawmakers.
Republican Sens. Don Gaetz of Niceville and David Simmons of Maitland praised Scott for proposing a bold cost-saving measure.
"It's a good start. It's an important discussion to have," said Sen. JD Alexander, R-Lake Wales, the Senate budget panel chairman.
Others were less enthusiastic.
Sen. John Thrasher, R-St. Augustine, whose constituents rely on Shands Jacksonville, urged Scott aides to "be careful that we don't compromise quality health care ... for these folks who need it the most."
"Jackson's getting hit. Miami Children's is getting hit," said Sen. Rene Garcia, R-Hialeah. "If we're going to spread the hit we should do it around the state."
Senate Democratic Leader Nan Rich of Weston called Scott's proposal "a disaster" and added: "I think it's going to destroy the health care continuum in our state."
Hospital lobbyists emphasized that the federal government pays a big chunk of Medicaid expenses through a matching formula. They said Scott's plan would save $385 million in state tax revenue but Florida would lose more than $1 billion in federal money.
Hospitals say they are currently being paid from 48 percent to 72 percent of the true costs of care. Paul Belcher of the Florida Hospital Association said hospitals have absorbed $966 million in cuts since 2005, including a 12.5 percent cut this year.
Dozens of Florida hospitals are losing money, especially in rural areas, Belcher testified.
"We do not support either the magnitude of the cuts or the policy behind the reductions," Belcher told senators.
Steve Bousquet can be reached at email@example.com or (850) 224-7263.