Florida improperly shelled out hundreds of millions of dollars to Miami-based Jackson Memorial Hospital, a government watchdog agency said in a report released Wednesday.
The analysis scrutinized potential misuse of the low income pool, Florida's program to subsidize hospitals' uncompensated care.
HHS' Office of Inspector General wants Florida to pay back the federal share of subsidies funneled to the health system from the LIP program. The $412 million in repayments recommended by the OIG would include $64 million in hospital-reported overpayments and $348 million in impermissible costs.
The Florida health department did not immediately respond to a request for comment about its next steps.
This federal estimate follows the OIG's multi-year audit of Jackson Memorial Hospital, a tax-exempt hospital system. The LIP subsidies are supposed to help Florida's hospitals offset uncompensated care and any shortfalls from Medicaid and Medicare dual-eligibles.
Both the Florida government and Jackson Memorial Hospital have disputed most of the OIG's conclusions. Their arguments prompted the OIG to review its analysis in light of the state's data and revise its recommended refund from $436 million to $412 million.
But the OIG ultimately stood by its findings and is pressing the state to reform the program and improve accountability. Hospitals should set up processes to return any excess or improper subsidies they received from the LIP, the agency said, and Florida needs to make sure it returns the full federal share of any overpayments. The OIG also urged the state to tighten its oversight of the entire program.
Jackson Memorial Hospital did not immediately respond to a request for comment.
According to the report, the hospital disputed several of its findings and particularly took issue with how the OIG factored Medicaid shortfall into its payment calculations. Jackson Memorial argued that Medicare and commercial insurance payments shouldn't be allowed to count against any shortfall in payments for patients enrolled in both Medicaid and Medicare.
This is the same argument that has plagued the CMS in ongoing hospital litigation over changes to the calculation of Medicaid and Medicare disproportionate share hospital payments. The Supreme Court this year sided with hospitals and rejected the government's revision to the Medicare DSH formula.
Florida's LIP has faced controversy over the last decade, after the Obama administration cut federal funding for the low income pool after the state refused to expand Medicaid under the Affordable Care Act. The Trump administration restored the funding in 2017, promising $1.5 billion annually through 2022. The program operates through a federal Medicaid waiver and started in 2005.
The program came about in part because the state gets one of the lowest Medicaid DSH allotments in the country, despite its large population and its sizable share of the nation's poor.
Jackson Memorial Hospital came under especial scrutiny because between 2010 and 2014 it received $1.8 billion, or more than 35%, of the total LIP funds. This subsidy was 3.6 times greater than what the state paid the hospital receiving the next highest amount.
From state fiscal year 2015 through 2018, the health system got more than 20% of the total LIP funds, or about $970 million.
The CMS had previously found that Florida did not adequately guide or monitor hospitals' claims on the funding.