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Florida Takes Another Look at Medicaid Expansion, With CMS' Help

Mary K. Caffrey
A deadline for the loss of federal aid for hospitals that serve the uninsured has reignited talk of expansion, and a key CMS leader said this week that the agency is willing to be "flexible."
When Florida’s Republican House Speaker Steve Crisafulli said 7 weeks ago that nothing would happen with Medicaid expansion in the current session, he crushed the hopes of hospitals and business leaders.

But there’s nothing like a deadline, and the prospect of a $2 billion budget hole, that can get people talking.

Yesterday, CMS’ Patrick Conway, MD, chief medical officer and deputy administrator for Quality and Innovation, spoke at a high-profile national healthcare conference at the University of Miami, where the host and president just happened to be former US Health and Human Services Secretary Donna Shalala. As reported in The Miami Herald, Dr. Conway spoke on broad terms of CMS’ willingness to work with Florida on Medicaid expansion. “There are some principles we have to adhere to, but we are willing to be flexible,” he said.

The same day, an opinion piece by State Sen. Rene Garcia, the Republican subcommittee chair who is charged with dealing with that $2 billion budget gap for indigent care, appeared in the Herald outlining his party’s take on how the issue has evolved.

This much is certain: Florida has, thus far, declined to expand Medicaid for those earning between 100% and 138% of the federal poverty line, a position that Medicaid expansion supporters say will cost the state $50 billion over 10 year under the Affordable Care Act (ACA). An estimated 1 million people fall into the coverage gap in Florida.

At the same time, an agreement between Florida and the federal government that targets aid to hospitals serving high numbers of indigent patients, called the Low-Income Pool or LIP, is set to expire June 30, 2015. And the federal government has made it clear the current terms will not be renewed.

Sen. Garcia writes that the impasse is over “honest policy concerns related to the funding and distribution of the LIP payments. … CMS believes that hospitals are being compensated too much money for the amount of costs that they have for providing this indigent care.”

All that may be true, but it omits the fact that across the country, hospitals face the loss of funds for treating the uninsured under schedules that are designed to square up with enrollment under the ACA.

The law was designed to encourage the uninsured to get coverage under Medicaid expansion and seek preventive services from primary care physicians, not wait until things got so bad that they ended up in the emergency room. Hospitals in states that failed to expand Medicaid are now paying the price for this decision, as they still must treat patients in the “coverage gap,” but they will not receive funds to do so. That’s why coalitions of hospital, community, and business leaders have sprung up in Florida, in Missouri, and even Utah to support expansion—so far to no avail.

Sen. Garcia’s letter discusses efforts by Governor Rick Scott to bring managed care to Florida’s Medicaid program, which he said fixed “a broken system of care.” Patients can still a doctor outside the network with a copayment, he writes. Today, Sen. Garcia said, “the need to develop a new LIP model that the federal government approves of is the most critical question facing public health in Florida at this time.”

The same advocates who called for Medicaid expansion previously say it’s an obvious part of the solution, if a proposal could simply get past the conservative Florida House.

At the University of Miami, Dr. Conway did not get into specifics. However, CMS has been unwilling thus far to allow states to charge premium to beneficiaries below the federal poverty line, something that has been discussed in Florida and which the Herald reports has been part of a Senate proposal. Requirements for beneficiaries to prove they are working or seeking work have also been problematic, although New Hampshire received a CMS waiver in early March with a mandatory work referral requirement.

Dr. Conway also declined comment on the possible outcome of King v. Burwell, which could affect premium subsidies in Florida since it does not have its own exchange.

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