On March 23, 2011, Governor Rick Scott established a commission to review whether government-run hospitals are in the best interest of taxpayers. He was motivated by a Florida Tax Watch report. This report show the rapid growth in hospital special taxing districts to pay for indigent care.
The Commissions draft report does highlight how concerned hospitals are over the medicaid reform approach the state is taking. The report did not suggest that public hospitals are not in Florida’s best interest. Here is the pull quote from the report. It
The Legislature has also established timeframes for the Medicaid program to move to managed care for the vast majority of its recipients. This is to be completed for the individuals receiving Medicaid long term care services beginning July 1, 2012 and completed by October 1, 2013; and for Medical services by October 1, 2014—Implementation begins January 1, 2013.
In a managed care environment, health plans and hospitals will negotiate a rate. They are not tied to the Medicaid rate, but the Medicaid rate is normally used in the negotiations as a reference or starting point. Sometimes, it ends up being the negotiated rate. If the state moves to DRGs, questions will occur as to how this may affect the health plans/hospital negotiation and establishment of a rate, as well as how local contributions may be affected.
Health plans will be required to contract with “essential providers” that offer services that are not available from any other provider within a reasonable access standard. Statutory teaching hospitals, hospitals that are trauma centers, hospitals located at least 25 miles from any other hospital will be included in this group.
It will be essential that managed care companies selected by AHCA in the competitive procurement process for the new managed care programs receive a fair portion in the capitation payment for the cells that represent the hospital component for each individual. Providing a system where managed care companies and hospitals receive fair compensation is a major challenge that will need continued monitoring and development by the Agency and the Legislature. It has been a somewhat contentious battle between hospitals and managed care companies surrounding the rate issues. Hospital rate increases should not be implemented without coordination of the managed care rate for the new program to be a success.
Taking both reports together, it would seem likely that property taxes may increase to fund local indigent care in the public hospitals. Keep an eye on this issue.