Scott instructed state health officials Monday to examine hospital contracts, warning that contracts over 120 percent of the Medicaid cap will be subject to an "immediate corrective action plan" that includes possible termination.
Scott and the insurers are locked in intense negotiations that could undermine the fledgling program that gives federal funds to private health insurance companies to oversee medical care for poor and disabled people instead of reimbursing doctors and hospitals for each service.
After federal hospitals funds were cut, lawmakers took $400 from the state budget to bump up Medicaid reimbursement rates. That put Scott on the defensive against hospitals. The insurers are also asking for a raise, saying they've lost $542 million through 2014.