Buoyed by $3.5 billion in extra money from the federal government, Gov, Ron DeSantis on Thursday unveiled a nearly $100 billion proposed budget that increases Medicaid rates for providers that care for the elderly and people with intellectual and developmental disabilities while keeping the base payments made to Florida hospitals essentially unchanged.
In all, the Governor’s proposed spending plan for fiscal year 2022-2023 recommends spending $45.8 billion across five state agencies to keep the state’s health and human service-related programs funded.
That’s $1.22 billion more than current spending levels.
The increases are driven in part by a spike in enrollment, with economists predicting that more than 5 million people will be in the program by the end of the year.
DeSantis proposes increasing nursing home rates by 5% in the coming year.
Florida Health Care Association President Emmett Reed said in a prepared statement that “meaningful investments in our state’s nursing centers will help address the workforce challenges that providers are facing.”
Reed added the budget was “an important first step toward ensuring these care centers have the resources needed to be competitive employers and offer higher wages and better benefits to attract new workers and incentivize current workers to stay.”
DeSantis recommended increasing funding to cancer hospitals but he didn’t recommend any increases in the base Medicaid rates paid to Florida hospitals, which earlier this year, saw record-high numbers of COVID-19 patients admitted as the delta variant spread across the state.
But one key health care item included in DeSantis’s budget impacting hospitals is the apparent reversal of a decision made by the Legislature earlier this year to eliminate what the Safety Net Hospital Alliance of Florida has dubbed the “Critical Care Fund.”
The money has been used to enhance the Medicaid payments made to a group of about 25 hospitals that provide large amounts of Medicaid care.
But an industry battle over the continuation of the enhanced payments has been waged over the last decade by hospitals that don’t qualify for the enhanced payments and the larger safety net hospitals that do.
The Legislature agreed to earmark $309 million for enhanced payments in the current fiscal year while also agreeing not to target any recurring revenue beyond the current fiscal year.
DeSantis’s’ budget, though, continues targeting $309 million and uses recurring dollars, which means the enhanced payments would extend beyond June 30, 2023.
“We are really pleased with the fact that it is in there and it’s recurring,” said Justin Senior, CEO for the Safety Net Hospital Alliance of Florida and the former secretary of the Agency for Health Care Administration. “Ultimately, that money goes to 25 or 30 hospitals in the state that see the most enrollees and they do the most complex care for moms and kids.”
DeSantis’s proposed budget is a recommendation only. It will be used as a blueprint by the Legislature, which is tasked with developing the state budget. Lawmakers will meet in January for the Legislative Session and will begin developing the spending plan.
Medicaid covers the health care costs for the poor, elderly and disabled and is jointly funded by the state and federal government. Due to the pandemic, Congress agreed to increase by 6.2% the amount of federal funds it contributes to the program. An increase in federal funding yields a corresponding decrease in the amount of required state funding.
Medicaid provides coverage for a wide variety of health care services, but it doesn’t provide coverage for home and community-based services that assist people with basic activities of daily living such as eating, bathing and grooming. When those services are properly provided, they can keep the elderly and people with intellectual and developmental disabilities out of institutional care. The services allow people to remain living in the community.
Florida operates Medicaid waiver programs to provide those services. The iBudget waiver is designed for people with developmental and intellectual disabilities and the Governor has recommended a $25.5 million increase for the program. That would remove 480 people from the waiting list.
But home and community-based waiver service providers worry the provider network may buckle under an increased demand for services and stagnate reimbursement rates.
DeSantis’s budget does include an additional $31.6 million to increase rates, a recommendation that providers and advocates are calling “historic.”
“My first reaction was I was encouraged there was something in the budget,” said Florida Association of Rehabilitation Facilities President and CEO Tyler Sununu. Increasing reimbursement rates has been a priority of his and Sununu is lobbying for a $240 million bump in funding, far more than what DeSantis recommended.
“This is still very encouraging, and some may even say it’s historic to see this in there,” Sununu said. “And it’s a good starting point.”
DeSantis’s budget also increases funding for behavioral health, providing $188.6 million for a variety of treatment services meant to reduce drug overdoses. The funding also is targeted for state mental health treatment facilities, forensic bed capacity and community based behavioral health services.
Additionally, the budget targets $82 million for battling opioid disorder.
Florida Behavioral Health Association President and CEO Melanie Brown-Woofter praised DeSantis and his wife, Casey DeSantis, for making mental health services a priority.
“The past two years have affected Floridians’ health and wellbeing in unimaginable ways,” Brown-Woofter said in a prepared statement. “With this recommended budget, FBHA’s community behavioral health providers can continue to provide life-saving treatment services for Floridians.”