by John Kennedy
The News Service of Florida
Florida analysts began taking stock Tuesday of the state’s latest federal windfall, but acknowledged it may be weeks before it’s clear how $700 million in additional Medicaid money will be distributed this year.
A six-month extension of the Federal Medicaid Assistance Percentages program was approved by Congress earlier this month. But it fell short of the almost $1 billion level state lawmakers anticipated when they approved Florida’s $70 billion budget and included $270 million in spending contingent on arrival of the federal cash.
The disparity between the expected and actual cash is at least part of the reason Gov. Charlie Crist and state lawmakers are currently examining the budget to gauge how best to deploy the new money, said Amy Baker, coordinator of the state’s Office of Economic and Demographic Research.
Also factors in the budget rebalancing: Crist’s $371 million in budget vetoes in May, which left budget holes the FMAP money could now be used to patch. Although the federal money must be used to cover Medicaid costs, it can free general revenue for other programs, Baker pointed out.
Crist’s biggest veto was a shift of $160 million out of the Department of Transportation trust fund into public schools. At the time, Crist said reserves could maintain the budgeted level of school funding, a move that may now be eased by the FMAP cash.
The governor’s veto of a planned 7 percent reduction in Medicaid rates paid to nursing homes, which will require $194 million in additional spending, also might be covered by the recently approved federal funds.
Also virtually certain with the FMAP approval is $50 million more for Miami’s financially troubled Jackson Memorial Hospital.
With the reshuffling of the budget, also being examined is whether lawmakers want to proceed with plans to spend $20 million more on a state jobs- and tax-break bill for businesses, $25 million more for the state’s Bright Futures scholarships, and $40 million for Everglades restoration, a fourfold increase in what lawmakers actually set aside for the environmental cleanup program.
Although analysts agreed that Florida’s Medicaid growth rate is slowing after making a steep climb as the recession hardened, incoming Senate President Mike Haridopolos’s push to rein in spending on the program also echoed during Tuesday’s estimating conference.
Mike Hansen, staff director for the Senate’s Health and Human Services budget committee, pushed estimators to reduce anticipated spending increases in Medicaid in 2012 and 2013. While estimators agreed to hold such projected hikes to 5 percent for hospital inpatient and outpatient services, 5.5 percent for nursing home payments, Hansen argued the levels should be roughly half that, warning that the higher standards only encourage overuse of services.
“The industry responds to what levels we set,” Hansen said.
But Baker and other analysts were wary. She said demographic trends suggest that nursing home spending will continue to rise because of an aging population – and merely lowering spending projections will not blunt that.
“If you’ve got higher demand for limited spots, you’re going to drive up prices,” Baker said.
Haridopolos (R-Merritt Island) took part in a three-day, multi-city tour which effectively revived the Legislature’s push to overhaul Medicaid, which now commands about one-quarter of the state budget and serves 2.7 million Floridians.
The Senate last spring sought to expand a five-county Medicaid pilot program to 19 counties to draw 250,000 low-income Floridians into managed care, while the House proposed bringing all Medicaid patients into such a system over the next five years.
Haridopolos has intensified the focus on overhauling Medicaid with the Legislature facing an expected $6 billion budget shortfall next year and an additional 328,000 Floridians forecast as being added to the rolls.