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House and Senate address concerns about hospital Medicaid funding

The House and Senate have compromised on how much money to put toward hospital Medicaid funding, allaying many of the concerns raised by safety net hospitals.

Under the compromise, an extra $88 million will be added to the pot of money used to pay all of the state's hospitals. Initially, the Senate had proposed no extra spending.

The Senate also backed down from its position that counties that use local taxes to draw down extra federal dollars should share almost half of their windfall with the rest of the state. Under the compromise, those counties only have to share 10 percent of their additional federal funding statewide.

Tony Carvalho, President of the Safety Net Hospital Alliance of Florida, said he won't know for sure how this impacts individual hospitals out until budget negotiators finalize the actual allocation formula. But the compromise reached today is a positive sign, he said.

"The formula that I believe that they've agreed to on DRG's would protect safety net hospitals," he said. "Again the disappointment is any diversion of the local tax money, but its 20 percent of what could have been a worst-case scenario."

Last year, the Legislature directed the state Agency for Health Care Administration to create a new system that pays hospitals flat fees based on Medicaid patients' actual ailments and treatment. This diagnosis-related group model -- or DRG -- is similar to how the federal government reimburses providers under Medicare.

Under the existing system, hospitals are paid based on the length of a patient's stay.

Safety net hospitals blasted the final proposal that AHCA sent to the Legislature, saying that the needies hospitals lost funding while for-profit hospitals saw increases. When the Senate and House each make tweaks, safety net hospitals praised the House proposal and blasted the Senate's.

Senate budget chief Joe Negron, R-Stuart, said his chamber agreed to the compromise because he wanted to make sure children's hospital funding didn't suffer under the new formula.

"We were doing our best to recognize the same factors that the House had in making sure that in this transition period that our children's hospitals would still have the funding that they need to complete their mission," Negron said.