When federal officials extended Florida's controversial Medicaid pilot program last month, they required the state to funnel an additional $50 million to improving care for low-income patients.
That much was clear.
But a state panel grappled for hours Thursday with how to carry out the requirements -- an issue that, ultimately, will land in the laps of Florida lawmakers.
The issue centers on a $1-billion-a-year program known as the Low Income Pool, which sends extra money to hospitals and other providers statewide that care for large numbers of poor and uninsured patients. The so-called "LIP" program was created as part of the pilot, which is controversial primarily because it requires most Medicaid beneficiaries in five counties to enroll in managed-care plans.
Federal officials agreed in December to extend the pilot through June 2014 but placed strings on how $50 million of the LIP money could be used. Those strings call for taking money that otherwise could go toward hospital services and requiring that it be spent on new or beefed-up programs to improve quality of care.
Faced with the prospect of losing money, some hospital officials have criticized the requirements. A LIP advisory panel struggled Thursday before coming up with recommendations that likely would lead to much of the $50 million flowing to hospital care initiatives.
The recommendations, approved by the Low Income Pool Council, could particularly help 15 hospitals that the federal government has singled out to take steps such as improving primary care.
Those 15 hospitals were targeted because they are the largest recipients of LIP money. They include prominent hospitals such as Jackson Memorial Hospital in Miami, Broward General Medical Center, Shands Jacksonville and Tampa General Hospital.
John Benz, a member of the LIP Council and a senior vice president of the Memorial Healthcare System in Broward County, said the 15 hospitals would face financial penalties if they don't meet the federal requirements for trying to improve quality of care. As a result, the recommendations call for them to receive a preference in tapping into part of the $50 million.
"Some institutions might not have the cash or willingness" to move forward with initiatives that would meet the federal requirements and avoid penalties, Benz said. "But this would provide them cash, a little momentum.''
Even before the new federal requirements, LIP was a complex -- and sometimes politically charged -- issue that faced the Legislature each year. It involves a complicated formula for distributing money to hospitals and other providers, and tweaks can affect where money goes.
Ultimately, lawmakers will make a decision on the LIP Council's new recommendations during the upcoming legislative session. Phil Williams, a top state Medicaid finance official and chairman of the LIP Council, will start the process next Wednesday when he presents the recommendations to the House Health Care Appropriations Subcommittee.
The LIP Council last month largely approved recommendations for how the bulk of the $1 billion should be distributed. But it left open the issue of the $50 million that was subject to the new federal requirements.
The council recommendations call for distributing $35 million of the $50 million to health providers through competitive proposals. The 15 targeted hospitals would have a preference in receiving that money. Also, preferences would go to hospitals that undertake projects with federally qualified health centers and county health departments.
Distribution of the remaining $15 million would be linked to a system of quality measures.