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UF Health Jax: FL health care funding conflict could close hospital

The CEO of UF Health Jacksonville says it will shut down if Florida does not find a way to continue a program that covers losses of hospitals’ that treat uninsured or underinsured patients.

The hospital receives $95 million a year in what is called “Low Income Pool” money, or LIP.  Chief executive Russ Armistead tells WOKV News that makes up about 20 percent of the hospital’s annual budget.  If the money is gone, he says they would run out of cash in six months and face troubles with creditors.

"We have the lowest amount of cash reserves or investments,” Armistead says. “I've got about 50 or 60 days of cash.  No investments.  Moody's gives us the lowest investment grade rating.  So I live right on the edge of financial crisis, but the place has lived like that for years.  I'm talking ten or fifteen years."

Right now the Florida legislature is conflicted on what to do.  Last year the federal government indicated the LIP program would cease on June 30, 2015.  With less than three weeks remaining in the session, there is still no plan set.   The Florida Senate has proposed both a new formula for distributing LIP funds and an expansion of Medicaid coverage.  The Florida House has been opposed to any addition money for Medicaid and is only willing to deal with the LIP program.  It's created a large budget discrepancy.

This week more conflicts arose.  Federal health officials on Tuesday said publicly they want expansion of Florida's Medicaid program as part of any deal to grant the Governor's request to help hospitals like UF Health Jax that treat poor patients.

Governor Scott says he's against expanding Medicaid to 800,000 or more Floridians because the federal government is getting closer to axing the LIP program.  He says it shows the feds can't be trusted to honor their commitment under the Medicaid expansion.

On Wednesday, Republican leaders in the Florida legislature said they will likely end the session with no deal on health care, meaning the taxpayers would have to pay for a special session if it has to be resolved later.

Meanwhile, Armistead at UF Health Jax says about 55 percent of his business revolves around pateitns with less ability to pay.  He says 40 to 45 percent comes from Medicaid; another 15 percent comes from uninsured.  Only 10 percent is from commercially insured patients (Florida Blue, Aetna, Coventry, etc.)

A typical hospital, according to Armistead, has 25 to 30 percent of its business come from commercial providers.

“Because we only have ten percent commercial business, that’s why our finances are so fragile,” he says.

Right now the Scott administration is holding out for LIP money, and state Senate Republicans want him to accept Medicaid expansion cash.

“I’m always nervous this time of the year,” Armistead says, referring to the legislative session.

In the past, Armistead says lawmakers usually come up with a last-minute proposal about how to distribute Medicaid or LIP funds.

“And the legislature has been very generous in coming up with solutions that continue to support the safety net hospitals,” he says.

The conflict centers on the Scott Administration wanting to keep Medicaid and LIP discussions separate, while the federal government wants them to happen together.  Some Floridians, such as U.S. Congressman Ted Yoho, believe the federal government is pressuring Florida to expand Medicaid under the Affordable Care Act.

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