Counties agree to sue over state Medicaid repayment law

TALLAHASSEE — The Florida Association of Counties said Thursday that it will sue the state over a new law that requires counties to pay $323.5 million in disputed Medicaid bills.

Pasco, Polk, Manatee and Leon counties vowed to join the suit in an effort to reverse the law, which requires counties to pay millions of dollars in backlogged bills. Others may follow.

The counties blame the debt on glitches in the state software system that led to thousands of errors and duplicate invoices.

"From the outset, we've said that local taxpayers shouldn't be forced to pay for Tallahassee's accounting errors," said Chris Holley, executive director of the Florida Association of Counties. "And to ensure that they are not, we will be pursuing legal action."

The board voted unanimously in favor of the suit during a conference call with attorney Ginger Delegal, who discussed the counties' legal standing. The call was closed to the media.

The problem stems from an agreement between the state and the counties to split long-term hospital care and nursing home bills for patients on Medicaid, the health care program for the poor and disabled.

The state has the authority to withhold its share of funding to recoup the money it says the counties owe. The law allows the state's 67 counties to pay back only 85 percent of their debt but will hold them responsible for the entire bill if they contest.

Florida Association of Counties spokeswoman Cragin Mostseller said the suit will likely pin on a provision in the state Constitution that protects counties from "unfunded mandates."

In other words, Florida can't reduce the percentage of taxes it shares with the counties without a two-thirds vote in the House and Senate, a threshold neither chamber achieved.

Florida counties and members of the tea party lobbied hard against the bill, accusing the state of refusing to fix its own errors and balancing its budget on the backs of counties.

When Gov. Rick Scott signed the bill two weeks ago, he took the unusual step of submitting a letter to the secretary of state and ordered officials with the Agency for Health Care Administration, which oversees Medicaid, to travel to every county to discuss billing issues.

The letter does not allude to a specific plan to fix the billing system, but Scott assured the counties that they will only be required to pay what is due.

Some of the counties have money in reserves, but others may have to raise taxes or trim expenses. The Tampa Bay Times reported Thursday, for example, that the law may force Pasco County, already facing a $5.3 million shortfall, to find another $3.5 million for the unexpected Medicaid expenses.

That's not fair, said Henry Kelley, legislative liaison for the Tea Party Network.

"The state gets to have a nice press conference that says, yeah, we balanced our budget," he said. "But from the taxpayer perspective, you just shifted the cost around."