In the health care policy arena, members of the health care appropriations committees received progress reports on the implementation of statewide Medicaid managed care (SMMC) and the transition to diagnosis related group (DRG) reimbursement for Medicaid-covered hospitalization.   The Florida Legislature approved the statewide transition to Medicaid managed care in 2011, although the federal government did not grant final approval until this summer.  In August of this year, the state began implementation of the first component of SMMC, the Florida Long Term Care program, by transition thousands of seniors into managed care organizations.  The second component of SMMC, the Florida Managed Medical Assistance Program, will begin to roll out in 2014; this program will transition 2.9 million Medicaid-enrolled individuals into managed care plans over the next few years.   According to AHCA, the SMMC implementation is on schedule.

Additionally, the change from per diem reimbursement to DRG reimbursement for Medicaid inpatient hospitalization, which took place on July 1, has reportedly been relatively kink-free.  Under the DRG reimbursement methodology, hospitals receive flat-rate reimbursements after submitting a code based on the particular procedure performed.

AHCA also updated the House and Senate Health Care Appropriations committees on the state’s ongoing discussions with AHCA regarding the Florida’s existing 1115 waiver, which authorizes among other things, the Low Income Pool (LIP).  Capped at $1 billion, LIP funds are used to compensate hospitals that provide a significant amount uncompensated care and serve large uninsured and Medicaid populations.  The LIP pool is funded primarily by intergovernmental transfers (IGTs), which are funds voluntarily provided by local governments that draw down additional federal funds.  Currently, most IGTs come from urban counties with large hospital systems.  The 1115 waiver authorizing the LIP pool expires on June 30, 2014, and the state is currently in negotiations with the federal government to extend the waiver and increase the $1 billion cap.  Specifically, AHCA stated that it would ask for approval of a $3 billion LIP pool.   AHCA also informed members about impending changes to the distribution of LIP funds to hospitals throughout the state. 

Homelessness Legislation

Sen. Latvala and Rep. Peters will be filing legislation in the upcoming session to create a dedicated state funding source for homelessness programs in Florida.  The sponsors held a stakeholder meeting on Wednesday to receive input from various entities, including FAC, individual counties, the state council on homelessness, as well as some non-profit and charity-based providers.  While the actual language has not yet been crafted, Sen. Latvala has made clear that his bill will not include any tax increases, although he discussed using incremental increases in doc stamp revenues as a potential source of funding as well as allowing local governments to generate revenues through local option sales tax referenda.  Another possible funding source would be new revenues that result from any gaming legislation.  In addition to identifying a funding source, the group also discussed how to best distribute funding among the state’s homeless coalitions and establishing distribution criteria.   Additionally, Sen. Latvala expressed interest in efforts to incentivize private entities to contribute to homelessness programs through tax credits.  Still early in the process, the two sponsors will reconvene with stakeholders during the November committee meeting, with the goal of having a bill filed by January 1.  For more information or with ideas, please contact Susan Harbin.