In his opening address as House Speaker in November 2018, José Oliva took aim at the “hospital industrial complex,” railing against what he saw as hospitals enjoying substantial profits and duplicative government funding streams while patients remained powerless.
That started a multi-year fight by lawmakers in both chambers for a more equitable approach to hospital funding, one that would remove much of the subjectivity and treat more than 200 hospitals fairly.
For five years, the Safety Net Hospital Alliance of Florida managed to turn lemons into lemonade by convincing lawmakers to convert what was supposed to be a short-term stopgap solution for a one-year loss of LIP funding into five years of recurring $300 million payments.
Nearly all that money went to the alliance’s own members, even though those hospitals provide less than half of the state’s Medicaid care. This year, the Legislature was done with the charade.
After SFHA rebranded it as the “critical care fund” and tried to change the legislative intent from Medicaid reimbursement to caring for very ill babies, lawmakers cut down the lemon tree, zeroing out the fund.
House leaders defend the move because hospitals are getting money from a new supplemental Medicaid financing program called Direct Provider Payment or DPP.
DPP is allowable under a federal waiver and lets hospitals use funds to bridge the difference between Medicaid reimbursements and their costs of providing the care. Florida does not contribute any state dollars to the DPP program. Instead, it is funded with local tax dollars generated by hospitals.
House Speaker Chris Sprowls said SFHA members were “contorting” themselves to justify their opposition to the change, noting that 2021 was a banner year for their bottom line due to the enhanced funding.
“They have a significant influx of money … and all we hear is ‘oh the sky is falling,” he said.
Hospital systems like HCA Healthcare, AdventHealth and Baycare — which collectively provide 35% of Medicaid services but have received a far smaller share of rate enhancement funding — were among the most vocal proponents of the change.
They have said for years that funding should follow patients. In 2022, the Legislature agreed.