Gov. Scott: 'I've gotta be more persuasive' on proposed Medicaid cuts

Florida State Representative Matt Hudson introduces the Governor of Minnesota Tim Pawlenty at the Rick Scott campagn stop at Vergina Restaurant  on Fifth ave in Naples. Photo/Gary Jung

Photo by GARY JUNG

Florida State Representative Matt Hudson introduces the Governor of Minnesota Tim Pawlenty at the Rick Scott campagn stop at Vergina Restaurant on Fifth ave in Naples. Photo/Gary Jung

Rick Scott, Florida Governor

Photo by Anonymous

Rick Scott, Florida Governor

Editor's note: This story was modified on Jan. 26, 2012

TALLAHASSEE — The chair of the House subcommittee on health-care spending says the budget he will unveil Tuesday will not include Gov. Rick Scott's proposed Medicaid reforms.

Rep. Matt Hudson of Naples did not say Friday how much of his roughly $30 billion state health budget will go toward Medicaid reimbursements to hospitals. But the second-term Republican has condemned the governor's plan to cut $1.85 billion from the system, a key part of Scott's budget recommendation.

Hudson said Scott's "draconian" proposal could "potentially shutter hospitals," and he balked at Scott's idea to establish 10 flat rates at which the state's 242 hospitals would be reimbursed for treating low-income patients.

When the subcommittee's budget comes out next week, he said "you will not see that hospital rate banding proposal."

Earlier Friday, Scott pushed back, undeterred by critics, in a phone interview with the Daily News.

"I've gotta be more persuasive," he said.

He said his plan to revamp Medicaid not only makes sense but is necessary to keep state expenditures down.

The cost of Medicaid to the state has nearly doubled since 2002. As the multi-millionaire former head of a for-profit hospital system, Scott said he saved money by going "through department by department to figure out efficiencies."

"We shouldn't be paying hospitals dramatically different amounts for the same services," Scott said.

Scott's plan involves grouping the state's 242 hospitals into 10 categories, such as teaching or children's, and leveling the reimbursement rates based on average costs. It also cuts back the number of days the state will reimburse hospitals for inpatient care. Currently, every hospital is reimbursed at a different rate based on cost.

Scott said such a system is not sustainable and strips dollars from other programs like education.

Because the U.S. government helps subsidize Medicaid, cuts to state funding diminish how much is drawn down. That means leaving $1.2 billion on the table.

It wouldn't be the first time Scott said "no thanks" to Washington. He refused $2.4 billion for a high-speed rail system last year, arguing that federal spending deficits hurt everyone.

"Every dollar of federal money always has a string attached," Scott said. "It is never free."

The public got a glimpse of where the Legislature stood on Scott's plan Thursday, when House Speaker Dean Cannon released budget allocations for broad spending categories. In a memo, he indirectly referred to Scott's Medicaid reductions, writing that the House will avoid "cost shifts toward the other aspects of our state-funded health care infrastructure, including driving uncompensated care into our public hospitals and emergency departments."

Beneath the eye-catching reports of millions lost to hospitals — Lee and Collier hospitals stand to lose upwards of $56 million under the governor's plan — health-policy experts are clashing over how government and health-care providers should assist the impoverished and elderly sick.

Last year, the Legislature passed controversial health-care reform, which, if approved by the Obama administration, will transfer the Medicaid program to private managed care. With funding from the state locked, the managed care plans could profit if patients are treated cheaply but would absorb extra costs.

Separately, states and the federal government have shifted toward health-care reimbursements based on the treatments provided instead of for average costs, a strategy known as a diagnosis-related group, or DRG, system. By this method, the Medicaid program would pay different inpatient rates for a broken ankle and brain surgery.

Florida is moving that direction, but slowly. Scott sees his proposal as an intermediary step between the current system and a DRG system.

"We need to go to a DRG system the earliest we can," Scott said. "But in the meantime, we cannot afford to have our Medicaid program grow at billions of dollars year after year."

Whether his 10 flat-rate categories, which he calls "rate bands," really incorporate aspects of a treatment-based system is up for debate.

On Friday, Scott said he would consider breaking certain expensive programs out of the rate band structure if a hospital brought such a program to his attention. He said no one has.

Paul Duncan is chair of the Department of Health Services Research, Management and Policy at the University of Florida. He said the governor's funding model in theory "provides good middle ground" as the state transitions. But he has strong concerns that real costs of Medicaid care to hospitals could be ignored by the proposal.

"If some of the hospitals within a particular band are providing expensive services on which they are effectively forced to lose money, while other hospitals in the same band are not providing those services, important cost differences are not being captured," Duncan said.

For some, including Hudson and another Naples health-policy advocate, Tarren Bragdon, the change would be too complex and damaging to hospitals faced with deep cuts.

"It's a big change to make when you're going to change everything again in two years," said Bragdon, head of the free-market think tank Foundation for Government Accountability.

Scott has said he "can't budge" on a proposed $1 billion increase in education funding. The 60-day legislative session is only in its third week.

"The things that I've proposed make sense," he said. "It's fair to the hospital providers, it's fair to the taxpayers of the state and it'll be good for Medicaid recipients.

"So I've just got to be more persuasive."

© 2012 marconews.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

  • Discuss
  • Print

Related Stories

Related Links

Comments » 0

Be the first to post a comment!

Share your thoughts

Comments are the sole responsibility of the person posting them. You agree not to post comments that are off topic, defamatory, obscene, abusive, threatening or an invasion of privacy. Violators may be banned. Click here for our full user agreement.

Comments can be shared on Facebook and Yahoo!. Add both options by connecting your profiles.

Features