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HomeBusiness & CommunityCounty approves ordinance taxing local hospitals to fill federal Medicaid reimbursement gap

County approves ordinance taxing local hospitals to fill federal Medicaid reimbursement gap

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Commissioners at the August 24, 2021 Board of County Commissioners (BOCC) meeting voted unanimously via a roll-call vote to enact an ordinance that will effectively tax area hospitals and put those funds toward filling a 40% gap in Medicaid reimbursement.  The resulting fund is called the Local Provider Participation Fund (LPPF).  Hospitals are currently receiving 60% of their fees from Medicaid to pay for inpatient care.

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According to information provided by Bayfront Hospitals, Hernando County hospitals are currently losing an estimated $14 million each year in unreimbursed services.

The matter came before the board at the request of Bayfront Health Brooksville, Bayfront Health Spring Hill, and Oak Hill Hospital.  Encompass Health and Springbrook Hospitals will also be included in the non-ad valorem special assessment collection, however did not participate in the discussion.

The special assessment will be levied on each of these facilities, and the federal government will match $1.27 for each dollar paid into the LPPF by the hospitals.  Taxpayers in the county will not be affected, nor will the county’s budget.  This will be the case should the program end.

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Commissioner Steve Champion initially called the measure a “shell game,” summarizing that the county taxes the hospitals, that money goes to the state, then the state reimburses more in Medicaid funds to make up for the current shortfall.

Colleen Ernst of Adelanto Healthcare Ventures (AHCV) responded, “The hospitals are coming to us and asking to be taxed?  They are, because the federal government has essentially promised to match the dollars [the hospitals] put in.”  Plus 27 cents.

AHCV is the state entity that is assisting hospitals and local governments understand and implement the new funding device.

The hospitals are to be reimbursed through the same entities (Managed Care Organizations) that the state contracts with that currently reimburse for Medicaid.

According to Ernst, this federal match will require a yearly approval by the BOCC.

Champion stated his concern that the program will be short-lived. “You can count on a fight coming between Biden and DeSantis, so I wouldn’t count on [federal funds] every year.”  However, Ernst countered that Florida’s application for this program “was at the behest of Governor DeSantis … these are federal dollars on the table, and if they’re not coming to the state of Florida, they’re going someplace else.”

Medicaid is a joint federal-state health insurance program that provides medical

coverage to a low-income population consisting of children, pregnant women, people

over 65, and individuals with disabilities.  Medicaid is jointly funded by states and the

federal government through federal matching of state funds.

The new ordinance will create a new Article II of Chapter 15 of the Hernando County Code.

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