Florida Gov. Rick Scott plans to sue the CMS, accusing the agency of unconstitutionally trying to force the state to expand Medicaid by ending funding that now helps Florida hospitals pay for uncompensated care for low-income and uninsured patients.
Some experts, however, question the strength of the legal argument.
Scott called the CMS' actions “appalling” in a statement Thursday. The federal government intends to stop sending Low Income Pool (LIP) funding at the end of June. The state has been receiving more than $1 billion a year in assistance under a Medicaid waiver.
“Not only does President Obama's end to LIP funding in Florida violate the law by crossing the line into a coercion tactic for Obamacare, it also threatens poor families' access to the safety net healthcare services they need,” Scott said.
Meanwhile, the CMS said in a statement that LIP funding has long been set to expire this summer.
“Florida, like all states, is free to implement Medicaid expansion or not,” the agency said. “Florida is requesting an additional optional extension, which raises a different question: whether it promotes the objectives of the Medicaid statute to use demonstration authority when the state has statutory options that would better serve the low-income population.”
Earlier this week, CMS Acting Director Vikki Wachino sent Florida Medicaid officials a letter saying the CMS made it clear last year that the LIP would not continue in its current form. She also wrote that the Affordable Care Act established a “more comprehensive approach to providing health care coverage, including Medicaid” and that expanding Medicaid would reduce uncompensated care in Florida.
“We believe that the future of the LIP, sufficient provider rates and Medicaid expansion are linked in considering a solution for Florida's low income citizens, safety net providers and taxpayers,” Wachino wrote.
Scott seized on that portion of the letter, saying the Obama administration is attempting to coerce the state into expanding Medicaid and running afoul of the Supreme Court's 2012 decision in NFIB v. Sebelius. The justices ruled in that landmark case that the healthcare law's requirement that all states expand Medicaid or lose their Medicaid funding was unconstitutional coercion by the federal government.
“President Obama has decided that the state must take on a larger Medicaid program, forcing our taxpayers to pay even more to government, before they get their own federal tax dollars back,” Scott wrote. “This is outrageous, and specifically what the Supreme Court warned against.”
Some legal experts, however, call Scott's claims of unconstitutional coercion a long shot.
“This is the kind of discretionary decision that HHS makes all the time in the Medicaid program and the lawsuit has no merit at all,” said Tim Jost, a law professor at Washington and Lee University and a proponent of the Affordable Care Act. “This isn't Congress adopting a law, completely changing an existing program and threatening to penalize the states if they didn't go along.”
Sara Rosenbaum, a professor of health law and policy at George Washington University, also said the situation is markedly different from the one in the NFIB case. She called the change a “small tweak” to Florida's multibillion dollar Medicaid program.
“The governor is having a tantrum essentially, and is raising constitutional claims that have no merit,” said Rosenbaum, also a supporter of the ACA. “This doesn't even begin to rise to the level of an unconstitutional coercion.”
But Todd Gaziano, a senior fellow in constitutional law with the conservative Pacific Legal Foundation, said the Florida situation presents the same legal issue as the one in NFIB. Still, he said, the argument of unconstitutional coercion in the Florida case, is "far from a slam dunk." The Pacific Legal Foundation filed a separate lawsuit challenging the ACA.
"It's the kind of claim that should not be dismissed at the outset," Gaziano said. "It's a claim that presents a reasonable legal argument." But he conceded that the claim is not as clear, even if the government's object is the same: to apply pressure on the state to expand Medicaid eligibility.
Florida's Republican-controlled Senate has passed a budget that includes Medicaid expansion, but the GOP-led House has rejected that.
The Florida Hospital Association has lobbied hard for Medicaid expansion and says losing the LIP funding will hurt hospitals with high proportions of Medicaid and uninsured cases.
But Bruce Rueben, the hospital association's CEO, said the end of LIP funding shouldn't be construed as en effort by the CMS to force the state's hand on Medicaid.
“I think what's disappointing is we're in the middle of a funding crisis, Rueben said. "It's holding up the entire state budget, so rather than looking for a way to resolve the problem, this lawsuit is just another complication that is more likely to slow things down."