1. Health

Florida hospitals bracing for more Medicaid cuts

Joyce Schaer, left, a registered nurse with certification in neonatal respiratory care, and Linda Semones, a registered respiratory therapist, intubate a premature baby in All Children’s Hospital in St. Petersburg. Hospital leaders say the governor’s proposed cuts don’t take into account expensive high-tech care like that found in a neonatal intensive care unit.
Joyce Schaer, left, a registered nurse with certification in neonatal respiratory care, and Linda Semones, a registered respiratory therapist, intubate a premature baby in All Children’s Hospital in St. Petersburg. Hospital leaders say the governor’s proposed cuts don’t take into account expensive high-tech care like that found in a neonatal intensive care unit.
Published Jan. 25, 2012

TALLAHASSEE — Gov. Rick Scott's plan to cut about $2 billion in public funding to hospitals that care for the poor is devastating and even ridiculous, say hospital leaders who predict patient care will suffer if it is enacted.

Scott's fellow Republicans in the Legislature say they don't like his plan, either. But they admit that the hospitals — which took a considerable hit last year — will face another swipe of the ax.

Scott wants to cut Medicaid spending by nearly 10 percent this year to free up funds for education. He says health spending is a fair target because it has grown far more rapidly than other government spending.

"We need to fund education; it's the right thing to do," he said last week. "And Medicaid has been growing. And so you've got to change how you do things."

But because most Medicaid dollars come from the federal government, the move would free up about $422 million in state tax dollars for education. The rest would be federal matching funds that Florida would lose, said Bruce Rueben, president of the Florida Hospital Association.

What's more, he and others say, Scott has structured the cuts in a way that hits hardest at "safety net'' hospitals that provide the most care for poor people. Yet a few for-profit hospitals — including some owned by Scott's former employer Hospital Corporation of America — would actually get more tax funds under his plan.

Tampa General Hospital and All Children's Hospital in St. Petersburg would each face estimated cuts of more than $70 million, according to the Florida Hospital Association. But three Pinellas HCA hospitals — Largo Medical Center, St. Petersburg General and Northside — would each get a few million more.

"I can't make any sense of that," said Ron Hytoff, president and CEO of Tampa General.

Scott said he was unaware that his new rate system benefited for-profit hospitals.

"I don't know if that's true. I have not seen those numbers," he said Tuesday.

• • •

Scott's plan categorizes the state's 242 hospitals into 10 "rate bands'' that group hospitals said to be similar. Institutions that spend more than their band's average would see funding cut; those that spend less would get an increase.

Currently, hospitals are paid many different rates, with those that serve the sickest patients usually getting higher reimbursements.

Banding represents the biggest part of Scott's proposed Medicaid cut. Limiting the number of emergency room visits and days in the hospital that Medicaid will pay for, as he is proposing, would save the state more. Yet by law, hospitals must take everyone who turns up at their emergency departments, so hospitals would still have to provide that care.

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Scott said his plan creates a fairer system and rewards efficiency.

But hospital officials say differences between their institutions are too great for the banding plan to work.

For instance, Tampa General, the University of South Florida's primary teaching hospital, is grouped with Largo Medical Center, which trains residents from a number of osteopathic schools around the country. They may both be teaching hospitals, yet TGH offers high-cost services unique to the area, Hytoff said.

"How many hospitals have burn centers? We have the fifth leading heart transplant center in the U.S.," said Hytoff, whose institution lost $20 million in Medicaid funds last year.

"We are different. … This is totally ridiculous."

Officials from HCA could not be reached for comment.

At All Children's, where 70 percent of the young patients' care is funded by Medicaid, a projected cut of $71.7 million would be "insurmountable," said CEO Gary Carnes. "It would be crazy.''

Bayfront Medical Center in St. Petersburg would see an $18.5 million cut, a "devastating blow," considering the hospital took a $9 million cut in 2011, said CFO Bob Thornton.

In South Florida, Jackson Memorial, Miami's huge public hospital, would see the largest cut in the state, at $233.8 million. In neighboring Broward County, Memorial Hospital would be slated to take a $73 million hit, while Broward General would see a $61 million cut.

• • •

Legislative leaders agree that the rate-banding plan oversimplifies a complex industry.

"I can tell you that I'm extremely uncomfortable with the notion that we could treat the more than 200 hospitals in the state and lump them together in 10 separate categories and assume a hospital in Tampa gets paid the same as a hospital in Miami when they treat a completely different demographic of people," said Naples Republican Matt Hudson, who chairs the House's Health Care Appropriations Subcommittee.

Yet, he warned, there's no way to avoid cuts.

"I think that there will be a cut to hospitals. I just do not believe that it will be as extreme as what was advocated by the governor,"

His subcommittee's budget proposes cutting reimbursement rates by 7 percent across the board for all hospitals except those that serve children or rural areas. It also reduces nursing home payments by 2.5 percent, creates new restrictions for general care and eliminates reimbursements for podiatrists and chiropractors.

One of the governor's ideas, limiting emergency room visits for Medicaid patients, is in the House plan.

Sen. Nan Rich, D-Weston, who serves on the Budget Subcommittee on Health and Human Services Appropriations, said the governor's methods would be "devastating" to hospitals. "They can't sustain another major cut like this without impacting access and quality of care to Florida," she said.

The Senate panel is scheduled to meet three times this week to discuss the governor's proposal and its own ideas. Chairman Joe Negron, R-Stuart, said it's too early to tell how much of Scott's plan will be reflected in the Senate budget.

Scott has said he is open to suggestions. But he has made it clear he will not support a budget that doesn't dramatically increase education spending. Medicaid, he said, offers one of the few places this year to find the money.

"I believe the number is $1 billion," he said.

• • •

There are other ways to reduce Medicaid spending, hospital leaders say. Carnes sees promise in the state's goal of moving more Medicaid patients into managed care. Rueben prefers a plan that would categorize Medicaid patients based on the type and severity of their illness, and pay hospitals accordingly.

But none of that can happen quickly, so in the near term hospital leaders are expecting significant pain.

"I'm not confident of anything," Hytoff said. "We have to plan for the worst and hope for the best."

Times/Herald staff writer Steve Bousquet contributed to this report. Richard Martin can be reached at Tia Mitchell can be reached at


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