Florida Gov. Rick Scott Tuesday followed through on his threat to file a lawsuit alleging HHS is illegally trying to coerce the state into expanding Medicaid eligibility by threatening to end funding for hospitals that care for low-income patients.
As part of a federal Medicaid waiver, Florida has received between $1 billion and $2 billion annually since 2005 in low-income pool funding, which helps safety net providers with uncompensated-care costs. That waiver is set to expire in June.
Earlier this month, the CMS informed the state that “the future of the (low-income pool), sufficient provider rates and Medicaid expansion are linked.” The Obama administration has delivered a similar message to other states that have low-income funding under Medicaid waivers and have decline so far to expand Medicaid eligibility under the Affordable Care Act.
Florida's Senate supports expansion, which would provide coverage to as many as 800,000 individuals. However, House leaders and Scott do not. The split on Medicaid has led to an impasse on the state's budget, with the House adjourning two days before the end of the legislative session after feeling a compromise could not be reached. State leaders will have to convene a special session to address the budget before the next fiscal year begins July 1.
Scott and Florida Attorney General Pam Bondi have asked Paul Clement, the attorney who successfully argued that the Obama administration could not coerce states into Medicaid expansion in NFIB v. Sebelius in 2012, to represent Florida in the case.
“President Obama's sudden end to the Low Income Pool (LIP) healthcare program to leverage us for Obamacare is illegal and a blatant overreach of executive power,” Scott said in a statement. “This sort of coercion tactic has already been called illegal by the U.S. Supreme Court.”
The CMS said in its letter to Florida officials >and has communicated to other states, including Texas, Kansas and Tennessee, that the low-income pool should not pay for costs that would be covered if the state expanded Medicaid eligibility.
The administration says the extension of the low-income pool is not a quid pro quo for Medicaid expansion but also emphasizes that the funding is part of an optional and temporary program established under a Medicaid waiver granted by the CMS.
Legal experts are divided about the governor's prospects for success. They note the Supreme Court's decision on NFIB v. Sebelius expressly prohibited HHS from taking away all of a state's federal Medicaid funding in order to get it to expand Medicaid. Some legal observers consider it a stretch to say withholding low-income pool funding presents a similar threat.
“The decision to expand Medicaid, or not, is a state decision," CMS spokesman Aaron Albright said in an e-mail. Albright said the agency does not comment on litigation.
"We will work with Florida and each state that has an uncompensated care pool regardless of its Medicaid expansion status, to support access to health care for low-income residents that works for individuals, hospitals and taxpayers, taking into account the state's specific circumstances," Albright said.
Rick Scott, et al v. HHS was filed in U.S. District Court in Pensacola.
