House budget eliminates LIP but assumes local funding support for health care

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When the Florida House unveiled its budget in March leaders said it contained none of the supplemental Medicaid funding used to help finance Florida hospitals that’s called the Low Income Pool.

The budget, though, contains about $800 million in “hospital rate enhancements.” Although the enhancements are not technically part of the LIP program they are funded with local tax revenue that’s sent to the state for the program.

The assumption is that local intergovernmental transfers will continue to be sent to the state even though the hospitals that contribute the money won’t see an 8.5 percent return on their investment.

The Senate budget also includes the $800 million in rate enhancements for hospital inpatient and outpatient care because the figures were agreed to by the Social Services Estimating Conference. Both chambers are required to use the agreed-upon figures as they begin to build their budgets.

The Senate budget, however, includes a reformed Low Income Pool program as well as a plan to expand Medicaid.

The House budget does not include a Medicaid expansion and, additionally, the chamber passed a conforming bill that actually eliminates from statutes the Low Income Pool program.

The assumption that locals will continue to send the money up may not be a good one.

Jackson Heath System spokesman Edwin O’Dell said his facility won’t contribute intergovernmental transfers if the Low Income Pool is eliminated as the House has proposed this session.

“There would be no reason to send up the (intergovernmental transfers) if we weren’t able to draw down on them,” O’Dell said.

No county or health system contributes more intergovernmental transfers than Jackson Health System.

Lee Memorial Health System sent $23.7 million in intergovernmental transfers to fund the Low Income Pool program and enhance hospital rates. Lee Memorial Health System Director for Community Projects Sally Jackson said the money won’t be forthcoming if LIP is eliminated.

“We would be hard pressed to send any IGTs if we didn’t get a return on investment,” said Jackson, who stressed that unlike other health care systems, Lee Memorial’s contribution is from the hospital’s operating budget. “We’d either investment the money ourselves or spend it to cover the costs of the shortfall of Medicaid.”

John Benz, Strategic Business and Development Officer for Memorial Healthcare System, said there isn’t enough information to make a determination about whether the system would continue to send up the money to Tallahassee. Memorial Healthcare contributes $100 million to fund the Low Income Pool program and hospital enhancements.

Halifax Fish Community Health Governmental Affairs Officer Dee Schaeffer said any decision on whether to send the county dollars for the Low Income Pool program would have to be made by the Halifax Community Health Board. Her hospital contributes $25.2 million.

She noted though, “It’s not reasonable to expect those funds to go to Tallahassee to with no assurances that the funds would go back to the community.”

Christine Jordan Sexton

Tallahassee-based health care reporter who focuses on health care policy and the politics behind it. Medicaid, health insurance, workers’ compensation, and business and professional regulation are just a few of the things that keep me busy.


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