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Report: No option as good for Florida hospitals as LIP

The state of Florida was given four recommendations on how it could replace upward of $2 billion in health-care funding if the so-called “low income pool” were to expire at the end of June, as anticipated.

The recommendations — which include, among other things, increasing the Public Medical Assistance Trust Fund assessment paid on hospital inpatient and outpatient net revenue, as well as a possible managed care assessment — are contained in a 244-page¬†report¬†conducted by Navigant and given to the state Agency for Health Care Administration and the Florida Legislature on Thursday.

“There is no perfect solution to this problem,” the report notes.

The federal government last spring approved Florida’s Low Income Pool program through June 30. The LIP is a pot of money funded by state dollars (collected from county intergovernmental transfers) that are matched by federal funds. The $2 billion goes mostly to hospitals and are used to treat the health-care costs of the underinsured and uninsured.

In approving the LIP through June 30, the federal government advised Florida to contract with an independent consultant and have a review of the state’s funding and payment mechanisms that will ensure quality services to Medicaid patients across the state without the need for the Low Income Pool.

Eliminating the $2 billion low-income pool would result in a 15 percent reduction in hospitals’ Medicaid reimbursements, which will cause a real hardship for hospitals with high percentages of uninsured patients or Medicaid patients, the report notes.

The report notes that no option offers the state as much flexibility as LIP.

“None of these funding models … afford the State the flexibility to maintain exactly the same payment levels currently made to individual hospital providers,” the report reads.

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