Scott signs budget packed with healthcare cuts

Florida Gov. Rick Scott today signed a $69 billion state budget that cuts hospitals' Medicaid reimbursement rates in the state by 12% and redistributes funding for hospitals that serve low-income patients so for-profit hospitals will receive a greater share of the cash.

The budget includes cuts totaling $4 billion compared with the current spending plan, including $510 million in cuts from Medicaid—changes that Moody's Investors Service said will have a marked negative effect on the state's hospitals. That includes $407.5 million in inpatient rate cuts and $102.9 million in outpatient cuts.

Bruce Rueben, president of the Florida Hospital Association, said the cuts would force some hospitals to either discontinue services or shift more costs onto privately insured patients, affecting employer health plans and hospital workforces. “A 12% cut is a very dramatic and significant cut. It is over half a billion dollars to hospitals who are already paid less than it takes to care of Medicaid patients before the rate cut,” he said.

The budget also enacts a statewide expansion of Florida's Medicaid managed-care program, though that will require a federal waiver before going into effect.

The budget maintained the low-income pool funding—money that goes to hospitals with large numbers of impoverished patients—at $1 billion. However, the distribution of those funds was changed through a legislative committee so more of it goes to investor-owned hospitals, the governor's spokesman Lane Wright said.

The state hospital association, which supported the low-income pool funding bill, offered a different explanation. Rueben said the total amount of low-income pool funding decreased, which changed how the money was distributed. “Some of the smaller hospitals got a little more in this process and some of the bigger hospitals got less, but that was trying to smooth out the fact that there was less money available,” Rueben said.

Scott, the former CEO of Columbia/HCA Healthcare Corp., has appointed a commission to study whether public hospitals should continue to exist in Florida in their current form. The Commission on Review of Taxpayer Funded Hospital Districts is set to meet May 27, the day after Scott signed the budget.

Though the Legislature decreased spending compared to the current year, Scott used his line-item veto power to cut another $600 million in spending before signing the budget. Healthcare spending took significant cuts, including: $1.2 million for cancer research, $2.2 million for Mount Sinai Medical Center graduate medical education incentives, $750,000 for the Bob Janes Triage Center in Lee County, and $1.5 million in planning grants for a new children's hospital in southwest Florida.