TALLAHASSEE — The biggest piece of Florida's budget puzzle fell into place Friday as state legislators divvied up $2 billion to hospitals for the costs of treating millions of people with no health insurance.
Working through the night, they split a pot of federal, state and local tax money among 134 hospitals for charity care in the low-income pool or LIP that's being cut back by the Obama administration.
"This is a huge step forward," said Senate President Andy Gardiner, R-Orlando.
To make up for the federal cut, the state will pump nearly $400 million into LIP in next year's budget, eating up nearly half of a projected $1 billion surplus. That $400 million will draw an additional $600 million in matching federal money.
Florida has the second highest number of uninsured residents of any state, and the Legislature's failure to agree on a payment plan in the regular session forced the current special session to ensure a budget by July 1.
The deal to help hospitals keeps lawmakers on track to finish their work by Tuesday, which would allow the session to end next Friday, June 19. The three-week special session costs taxpayers about $75,000 per day.
The largest recipients of low income pool money include Jackson Memorial Hospital in Miami, Broward General Medical Center in Fort Lauderdale, Tampa General and All Children's Hospital Johns Hopkins Medicine in St. Petersburg. All are members of a statewide Safety Net Hospital Alliance.
"We appreciate the work of the House and Senate to provide this badly needed revenue," officials at Tampa General Hospital said in a statement. "This state support, and the federal matching funds that come with it, will help Tampa General continue its mission of providing high quality medical care to the residents of Tampa Bay."
Dr. Jonathan Ellen, president and physician in chief at All Children's in St. Petersburg, thanked the Legislature for "supporting the unique services" his hospital provides to Florida's children.
Tony Carvalho, hospital alliance president, said the state funding will be "crucial to our hospitals' ongoing mission of providing highly specialized health services to the state's most vulnerable residents."
Still, hospital executives say the inevitable demise of the federal share of LIP money means the Legislature must find a long-term solution.
"This is a short-term budget compromise that does not address the underlying crisis facing Florida's health care financing," said Carlos Migoya, CEO of Miami's Jackson Health System, by far the largest recipient of low-income pool money.
The payment plan also includes higher reimbursement rates to hospitals for specific services, $204 million for Florida medical schools and $100 million for residency slots in graduate medical education programs.
It requires approval by the full Legislature, Gov. Rick Scott and the federal government.
The Legislature's decision to use state tax revenue to subsidize hospitals is another potential political defeat for Scott, who instead wanted to rely on local property tax money earmarked for health care, much of it raised in the state's two most populous counties, Miami-Dade and Broward.
But Scott's model would have forced deeper cuts to safety net hospitals, especially Miami's Jackson Memorial and Broward Health Medical Center in Fort Lauderdale. The Legislature's method also uses recurring or permanent revenue that hospitals can rely on in future years.
Scott's office said it was reviewing the numbers. The governor was airborne and on his way to France to seek aerospace jobs at the annual Paris Air Show.
Gardiner, vice president for external affairs at Orlando Health, a network of eight non-profit hospitals and one of the largest recipients of LIP money, thanked House Speaker Steve Crisafulli, R-Merritt Island, for helping to resolve the low income pool dilemma.
The fix for LIP was the second major linchpin that lawmakers have settled. The first was a deal on tax cuts.
In behind-the-scenes talks with the House, the Senate has already advanced $400 million in tax relief for next year.
The budget that's rounding into shape also will have less money for schools than Scott wanted and more modest tax cuts, though the Senate did propose a one-year repeal of taxes on college textbooks that the governor proposed.
The bigger tax cuts that Scott wanted are a casualty of the Legislature's decision to shift state tax revenue to hospitals.
Racing against a Tuesday deadline to finish work on a budget, the two budget chairmen, Sen. Tom Lee and Rep. Richard Corcoran, and their staffs continue bargaining behind closed doors in other unresolved spending areas.
They include implementation of the land and water protection programs known as Amendment 1, divvying up money for college and university construction and approving and rejecting hundreds of hometown projects in lawmakers' districts.
Times staff writer Kathleen McGrory and Miami Herald reporter Daniel Chang contributed to this report. Contact Steve Bousquet at firstname.lastname@example.org or (850) 224-7263. Follow @stevebousquet.