Local health care providers strategize as budget cuts near

June 22--Despite losing about $750,000 in the recent budget battle, the Heart of Florida Health Center vows that no patient will be turned away. However, those patients may have to wait longer to see doctors.

Meanwhile, Munroe Regional Medical Center, which lost about $5 million, is contemplating its next move.

"We are still examining what appears to be a dramatic decline in low-income pool (LIP) funding to our hospital, and will provide more information about what this means for our hospital and the services it provides after we finish our analysis," the hospital said in a prepared statement.

Heart of Florida will continue to work within Florida's new managed Medicaid program and seek new grants to offset the lost revenue.

"We have to make our adjustments accordingly," Heart of Florida CFO Richard Horn said.

In previous years, Heart of Florida received $400,000 per year from Munroe Regional Medical Center and $380,000 from the County Commission. It used that $780,000 to draw down another $720,000 or so in state and federal money designed to offset the cost of caring for low-, under- and non-insured patients.

But starting this fall, Heart of Florida will get nothing guaranteed from state and federal matches, although it will still get the local contributions. The full $1.5 million made up about 13 percent of Heart of Florida's budget.

The loss is fallout from the 2015-16 budget that lawmakers approved last week. It has yet to be approved by Gov. Rick Scott.

Heart of Florida isn't alone. Other local health care facilities appear to be some of the hardest hit. All told, Heart of Florida, Munroe and Ocala Regional Medical Center will lose a combined $8 million in state and federal money meant to offset the cost of indigent care.

The cuts followed the federal government's announcement that it would reduce its $2 billion LIP contribution to Florida by half. Florida tried to increase its contribution to the program to offset the loss and garner more federal money, but the result was still less LIP money for hospitals -- and more limits on how the money could be spent.

Heart of Florida has about 21,000 patients, most of whom are low-income and many of whom have no insurance or are on Medicaid. Last year, Heart of Florida saw its Medicaid ranks swell by 7,550 under Florida's new managed care plan for Medicaid.

Although the additional Medicaid patients required Heart of Florida to hire more medical staff, it also meant more revenues for the nonprofit.

Horn said Heart of Florida will apply for state grants in hopes of replacing the lost revenue. Katie Betta, spokeswoman for Senate President Andy Gardiner, said the Legislature set aside $50 million in grant money to help shore up the financial losses.

There are about 60,000 uninsured people living in Marion County. Another 45,000 have Medicaid. About 40 percent of Heart of Florida's clients do not have health insurance.

Munroe, which received nearly $6 million in LIP money last year, will see its LIP cut down to just above $1 million. That includes about $450,000 in additional Medicaid diagnosis-related group (DRG) payments. Munroe is leased by for-profit Community Health Systems, based in Franklin, Tennessee.

Ocala Health, which owns Ocala Regional Medical Center and West Marion Community Hospital, received $3 million in LIP funding during 2014-15. That hospital group will receive just under $1.6 million in LIP and new DRG funding.

Ocala Health would not comment about the loss in funding, other than to say the two hospitals will continue to provide quality care to its patients. Ocala Health is owned by Hospital Corporation of America, based in Nashville, Tennessee.

Betta said legislators used "a very complex formula" to determine how the money was divided among hospitals.

"The Legislature attempted to mitigate the loss of LIP funding," she said, adding later, "There's no way to totally mitigate the loss of the LIP funding. ... There was a significant reduction across the board."

Aaron Liberman, professor emeritus from the University of Central Florida's Department of Health Management & Informatics, said that to make matters worse, there is no telling what might happen to LIP funding next year.

Some of that uncertainty comes from Scott suing the federal government, saying that the feds are reducing LIP funding to pressure Florida to accept expanded Medicaid and add about 800,000 more Floridians to the Medicaid rolls.

Liberman said private hospitals will try to shift the LIP funding loss over to private insurance, other Medicaid programs, and even the noninsured to spread the financial loss rather than just absorb the cut.

"They'll use cost shifting. It's a very sticky wicket," Liberman said.

Contact Fred Hiers at [email protected] or 867-4157.

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