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Senate’s new LIP model increases base rates for all hospitals

The Senate on Thursday will propose an alternative Low Income Pool model that would use supplemental Medicaid dollars to increase the base rates all hospitals are paid to treat the poor, elderly disabled, uninsured, and underinsured.

The new modified LIP plan would still give the the major local contributors to the LIP program a healthy return on investment because the plan also calls on modifying Diagnostic Related Group payments for inpatient care to critical Medicaid providers, or those with trauma centers, neurological intensive care units for newborns, and burn centers.

By modifying the DRGs for those facilities the major contributors to the program (Tampa General, Jackson Memorial, South Broward Hospital District, and Shands Jacksonville) would still be guaranteed a healthy return on their investment and, therefore, would continue to be incentivized to contribute the local taxing dollars to the state, which uses the money to draw down a federal match.

In order for the new model to work, however, the federal government must sign off on allowing the total reimbursement to hospitals to exceed the costs to treat Medicaid and uninsured patients. That’s generally a no-no under the federal rules governing the LIP program.

The Senate has been working on the plan since the session started, weeks after a high-ranking federal official announced the state’s LIP program would not be renewed as is beyond summer.

The House this week unveiled a budget without any supplemental Low Income Pool dollars.

Deputy Secretary for Medicaid Justin Senior told Florida Politics this week that he hopes to have an agreement with the federal government by April 12 in regard to how much Florida can expect in Medicaid supplemental payment dollars so the Legislature can finalize the budget for the upcoming year.

Senior’s goal is to get $2 billion each year for the next two years. If he can get a broad agreement with the federal government by April he said the agency can hammer out the special terms and conditions with the federal government over the summer.

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