State regulators have unveiled a new Medicaid payment system to hospitals so they will be paid the same for the same medical care.
Yet some industry officials say money is being shifted away from "safety net" hospitals that treat the sickest patients.
"It's a redistribution of Medicaid money away from sick children and high-risk mothers to other categories," said Sally Jackson, government relations director for the publicly run Lee Memorial Health System in Lee County.
"It's a shift away from public hospitals and away from teaching hospitals. It's very clear."
The state's decision to change Medicaid funding to hospitals is to help control costs of the $21-billion program, agency spokeswoman Sheila Coleman said.
Lee Memorial operates four hospitals, including the only trauma unit and the only children's hospital in the region. It stands to lose $8.2 million next year under the new payment system, Jackson said. That's out of $105 million in Medicaid funding last year.
Jackson said the Safety Net Hospital Alliance of Florida has calculated the group's 15 public and teach hospitals would lose $106.5 million next year, or nearly 7 percent of its current Medicaid funding while other nonprofit hospitals would gain 3 percent more, or $24.5 million. The three large for-profit hospital systems in the state, which are Tenet Healthcare Corp., HCA Healthcare, and Naples-based Health Management Associates, would gain a combined $58.6 million, she said.
For HMA's 22 hospitals in the state, the gain is $8.7 million, Jackson said. HMA owns Physicians Regional Healthcare System in Collier County and Lehigh Regional Medical Center in Lee.
The Florida Legislature last year approved retooling Medicaid reimbursement to use an approach similar to what the federal government uses for Medicare.
That involves paying the same rate to each hospital for the same medical service, using what's called a "diagnostic related group" or DRG. The reimbursement can be adjusted for severe cases.
Currently, Medicaid in Florida pays hospitals a daily rate that historically factored in their cost to treat a patient. That approach has meant one hospital could get paid more than another, even if they treated the same patient.
The change intends to make hospitals operate more efficiently, state officials say.
"Converting to a DRG system promotes quality, it's designed to reward high value, quality-driven health-care services," Liz Dudek, secretary of the Florida Agency for Healthcare Administration, said in a news release.
In Collier County, the nonprofit NCH Healthcare System will lose $1.14 million next year, according to state estimates. That's based on $23.5 million in Medicaid funding in 2011.
Dr. Allen Weiss, chief executive officer and president of NCH, is concerned about the DRG system because of waste and fraud with the system now with Medicare.
"(The state is) doing what has already been tried and not working," Weiss said. "I'm concerned we are copying a system we know already doesn't work and if Medicare worked well, we wouldn't have the problems we have."
Weiss said the state should be looking at adopting a "bundled payment" system, similar to what the federal government is moving toward, which involves paying hospitals and doctors a combined payment for a patient's care in the hospital.
The for-profit Physicians Regional Healthcare System, owned by the Naples-based Health Management Associates, will gain about $305,000 under the new Medicaid payment system next year. Its Medicaid reimbursement was $3.3 million in 2011, according to the state.
Alan Levine, a senior vice president for HMA and president of its Florida Group of 22 hospitals, said the state in recent years has been paying hospitals for about 60 percent of its cost for treating Medicaid patients, but they still are paid differently for the same medical care.
Levine, who served as secretary of the state health care agency under then-Gov. Jeb Bush, said the move to a DRG system isn't perfect but aims to be more rational.
"What they put out is a good start," he said, adding that state regulators need to move forward cautiously. The change is intended to kick in July 1.
He agreed with Jackson, of Lee Memorial, that money is being shifted away from some public and teaching hospitals to more community hospitals.
At the same time, Levine said, some of his smaller hospitals in Florida take care of high numbers of uninsured patients and operate neonatal units for premature newborns but aren't deemed "safety net" hospitals.
Jackson, nonetheless, said the state's consultant's left industry officials in the dark about what DRG model they would be using until the state issued its report last week.
The shift of money away from public and teaching hospitals and the public policy implications should be of concern to anyone who values what those hospitals do, she said.
"I don't know if that is what our elected officials wanted," Jackson said.