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$2 billion in health care funding at risk

Two billion dollars used to fund health care in Florida is at risk of being eliminated if the federal government doesn’t agree to extend a pool of money used to help fund health care for low income Floridians.

Authority for the Low Income Pool expires June 30 and renewal negotiations with the federal government to extend LIP have been put on pause, state officials say, while the state and federal government await an independent report, expected be released by Jan. 15.

“There’s a lot of consternation and there’s going to be a lot of discussion upcoming this Spring about what happens to the LIP going forward,” Deputy Medicaid Director Justin Senior told members of the Senate Appropriation Subcommittee on Health and Human Services.

Large hospitals like Jackson Memorial, Tampa General and Shands Jacksonville have used LIP dollars to “buy back” certain reductions that have been made to Medicaid rates. The enhanced rates, though, aren’t included in the capitation rate HMOs are paid as part of the new statewide Medicaid managed care program.

If LIP were to be eliminated and HMOs put at risk for higher hospital costs, it could increase how much the state has to pay the HMOs. HMO rates — which are required to be actuarially sound — are paid through general revenue and federal dollars.

Ultimately, what hospitals charge and what HMOs pay are decisions that will be made by the health care market and not the state, Senior said

“Is it possible none of (the LIP dollars) would have to be picked up by the health plans? I suppose so,” Senior said. “Is it possible that all of it would have to be picked up with general revenue or replaced by general revenue? I suppose so. Or anywhere in between. And that would be a difficult thing to predict. and it would be a market place function.”

The federal government required the study last year when it agreed to extend the LIP through June 30. The Legislature earmarked $500,000 in the 2014-15 General Appropriations Act to fund the analysis, being conducted by Navigant.

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