State lawmakers have accepted to cut $160 million from the region of South Florida hospitals under a significant budget the Legislature plans to pass early next week.
Statewide, the proposed South Florida hospitals funding cuts total $521 million for the year that starts on the day of July 1 — all coming from a combination of general revenues of Florida and the federal government’s matching funds under the Medicaid program. But nearly a third of the cuts will affect the hospitals in Miami-Dade and Broward counties.
Cuts would be deepest at the hospitals that take on the greatest number of Medicaid sufferers and the uninsured, specifically public hospitals.
In total, Memorial Healthcare System in Broward County is seeking at $26.6 million in budget cuts. Broward Health, whose legal name is the North Broward Hospital District, is seeking at about $24.3 million in cuts. And Miami-Dade’s Jackson Health System, the largest public hospital of state with the highest number of Medicaid patients per year, faces a $32.5 million cut.
South Florida Hospitals cuts will be greater in future years, starting on the day of July 1, 2018, when the statewide total is projected to be closer to $650 million a year.
“We are disappointed that the Legislature felt they required to cut $651 million from hospital reimbursement rates,” stated Tony Carvalho, president of the Safety Net Hospital Alliance of Florida. “Although, there was an attempt to reduce the impact on safety net hospitals and we will not know the final impact until the terms and conditions on Low Income Pool are adopted.”
Lawmakers, too, are banking on the Low Income Pool, a pot of money to repay hospitals that care for individuals who can’t afford to pay and do not have insurance. The federal government provided the state permission to revive the program this year, but it is not yet clear how that fund would be dished out to hospitals or even how much money will be in it.
If regional hospital districts are capable to raise enough money to draw down federal funds, the pool could hit a maximum of $1.5 billion per year. In that situation, claims House Appropriations Chairman Carlos Trujillo, R-Miami, hospitals might come out ahead.
“Now all of a sudden with LIP coming back into play, the query is do they still require that much money?” he said. “If it is what we hope, next year, we could possibly cut money and they will still be held whole. So it is merely shifting the burden more to the federal government.”
But hospital executives claimed that it was too early to tell how the reductions would affect them — in part due to the uncertainty surrounding terms and conditions for LIP.
“The governor was able to secure $1.5 billion from the federal government, but those dollars haven’t flowed anywhere because no one knows the methodology,” said Aurelio Fernandez, CEO of Memorial Healthcare System in Broward County.
The current LIP program sunsets on June 30, and Fernandez said hospitals hope to receive more details on how those funds will be distributed before then.
Fernandez said the opacity on LIP has placed all public hospitals in a “waiting pattern” but he vowed that Memorial Healthcare, which runs six hospitals as part of the South Broward Hospital District, would not reduce services or lay off employees.
Still, he said, Memorial would have to reconsider capital investments in infrastructure if the cuts are deep. “Building will take additional consideration,” he said, “but day-to-day operations … that in no way is going to be compromised because of these cuts.”
Jackson administrators were not available for comment Friday.
The prospect for deeper cuts is on the horizon, as well, as the Legislature has teed up an additional $130 million in statewide cuts the following year, unless lawmakers put additional money into the South Florida hospitals next year.
The Florida Hospital Association has warned lawmakers in Tallahassee for months that any cuts could harm patients.
“Adequate funding for Florida’s Medicaid program ensures our most vulnerable children, pregnant women, disabled and elderly people have access to critical healthcare services,” Bruce Rueben, president of the FHA, said Friday. “The Legislature’s decision to reduce more than $521 million from this important program will be felt in communities across our state.”
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