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Medicaid reform left a fiscal time bomb in Florida Legislature

TALLAHASSEE — State lawmakers learned this week that former Gov. Jeb Bush's controversial Medicaid reform plan from 2005 includes a time bomb for hospitals: a $300 million penalty.

That's the amount Florida could lose in federal charity health care money if legislators don't expand Medicaid reform statewide within two years. Medicaid reform is an experimental program designed to shift more Medicaid patients to managed-care plans and make the public health system run more like private companies. It currently operates in Broward County and the Jacksonville area.

The state receives about $1 billion a year from the federal government to reimburse hospitals for charity care. If the state doesn't expand Medicaid reform by 2011, it would lose $300 million of the money.

Just informed of the penalty, legislative leaders now are scrambling in the waning days of the lawmaking session to pass special budget language that asks the federal government to give the state more time.

They'll also decide whether to bank about $246 million in surplus hospital money. Tampa General Hospital and Miami's Jackson Memorial Hospital, which would be hit particularly hard if Medicaid funds are cut, want the state to hold onto the money to help fill the $300 million hole if the state fails to broaden the reform program statewide.

Some legislators want to kill Medicaid reform entirely.

"We've done the experiment. It has failed," said Durell Peaden, the Senate's health care budget chief. "The reports are unsettling. People couldn't get to specialists, couldn't get adequate care. And they couldn't do it cheaply."

But supporters point to a recent University of Florida study that found patients are highly satisfied with the program.

Former Bush health chief Alan Levine said the state needs time to make the program work. He said the federal government would likely grant an extension to Florida.

"There are things that work in Medicaid reform," said Levine, who now heads Louisiana's hospital system. "There are other issues that will take time to figure out."

The threat of the $300 million loss in the 2010-11 budget year has added a new dimension to the fight over Medicaid reform. It renewed a behind-the-scenes battle between private hospitals such as the Hospital Corporation of America and large charity-care hospitals like Jackson Memorial and Tampa General.

The public hospitals want the state to save the surplus money this year in case of a future deficit. The private hospitals would rather see the state give each hospital its share of the $246 million.

Marc Caputo can be reached at mcaputo@MiamiHerald.com.

Medicaid reform left a fiscal time bomb in Florida Legislature 05/01/09 [Last modified: Friday, May 1, 2009 11:30pm]
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