Florida To Seek More Federal Dollars For Hospitals Treating Low-Income Patients

Sep 24, 2013

Florida’s state healthcare agency plans to ask the federal government for$3 billion this year to cover the cost of treating low-income and uninsured patients. The request is aimed at boosting the so-called LIP pool for hospitals and other health care providers.

Florida received its initial low-income pool, or LIP, funding from the federal government eight years ago, as part of a Medicaid managed care pilot project. Now that pilot is a permanent program, and is also statewide. It's also time to renew the waiver.

The money is aimed at closing the gap between how much it costs to treat those patients, and how much Medicaid pays in reimbursement. Now the state is planning to ask for three-billion LIP dollars, and state Agency for Healthcare Administration Deputy Medicaid director Justin Senior says the time is right for the increase:

“Our feeling, here at the agency, is that there are opportunities to make the LIP program larger. We have talked with the federal government about that, and the federal government, by and large, they seem genuinely receptive to the possibility of it.” 

LIP money also helps fill holes left when patients can’t pay their hospital bills. That’s called uncompensated care, and it costs Florida hospitals billions each year. The federal government’s Medicaid expansion would have insured more people, but Florida rejected that funding. And Safety Net Hospital Alliance lobbyist Lindy Kennedy says even if the state was getting more Medicaid dollars, there still would be a need for the LIP money, because reimbursement rates remain low.

“You know, 50 percent of a dollar is better than 20 percent of a dollar, but you would still be losing money," she says.

Florida officials plan to submit a request to renew the LIP money in November, and they say they’re sure the federal government will require additional cost-saving and efficiency rules for participating hospitals. Texas has a similar program and in that state, hospitals and providers had to submit plans for how they would increase the quality of and access to care.