Hospitals across the state will begin receiving their share of $1.8 billion in additional Medicaid funds under a new supplemental financing initiative called the Hospital Directed Payment Program.
The $1.8 billion in payments will be made through the state’s Medicaid managed care system. Managed care plans can begin distributing the funds under a budget amendment Agency for Health Care Administration officials sent to legislative leadership Nov. 19. Those amendments take effect 14 days after submission so long as there are no objections.
The Hospital Directed Payment Program is a supplemental payment program that is meant to bridge the difference between Medicaid reimbursement rates and the actual costs of providing the care. It is funded through local dollars that are used to draw down federal Medicaid dollars.
Florida used more than $622 million in local funds to draw down $1.24 billion in matching federal Medicaid funds for state fiscal year 2021-2022, or Year 1 for the program.
The program is administered regionally and provides supplemental payments to three different types of hospitals: cancer, public, and private.
In order to qualify, all regional hospitals in the class must agree to participate in the program and be subject to an assessment.
In order for private hospitals to participate, they must agree to work with a local government partner to create what is known as a “local provider participation fund.”
According to the budget amendment, all public hospitals in the state participated in the DPP program Year 1. None of the cancer hospitals participated in the program in Year 1. And private hospitals in Medicaid Regions 5,6 and 10 were not able to participate the first year because they weren’t able to find a governmental partner.
The budget amendment notes that “in all other regions the private hospitals were at least able to find one governmental partner who will fund the region’s state share.”
No facility will receive more than Jackson Memorial Hospital in Miami, the state’s largest provider of Medicaid services. It will collect more than $208 million in so-called DPP funds, a budget spreadsheet shows.
Jackson netted an increase of more than $138 million in supplemental DPP funds, after accounting for the funds the hospital contributed to help finance the program.
While the Year 1 DPP funds have been approved and are being sent to hospitals there are concerns about the financial security of the supplemental Medicaid program going forward after the federal Centers for Medicare & Medicaid Services recently rejected three direct payment programs in Texas.
Senate Health and Human Services Appropriations Committee Chair Sen. Aaron Bean said previously he thought CMS was being punitive to Republican states.
“Do I think it’s punishing red states? Yes, I do. Do I think they have singled out certain states? Yes, I do,” Bean said.