Feds cut Florida Low Income Pool program funding in half

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CMS has agreed to help fund Florida's Low Income Pool program for two more years. However, the federal government will be contributing far less money to the program than it has in the past.

Florida has had a Medicaid waiver since 2005, and the state has received between $1 billion and $2 billion from the federal government annually to support its LIP program to aid the state's safety-net hospitals. In April, CMS sent a letter to the Florida Agency for Health Care Administration suggesting that the fate of the state's LIP program is tied to Florida's decision on Medicaid expansion.

"The state's expansion status is an important consideration in our approach regarding extending the LIP beyond June," wrote Vikki Wachino, acting director of CMS' Center for Medicaid and CHIP Services, in the letter to the FAHCA. "We believe that the future of the LIP, sufficient provider rates, and Medicaid expansion are linked in considering a solution for Florida's low income citizens, safety-net providers and tax payers."

In response, Gov. Scott filed a lawsuit against the federal government for allegedly withholding money from Florida to force it into expanding Medicaid.

Ending the stand-off between Gov. Scott and the federal government, CMS has agreed to provide Florida with $1 billion for its LIP program for 2015-2016, down from the nearly $2.2 billion it currently provides, according to The Hill. In 2016-2017 that number will drop to $600 million.

Although CMS has offered funds for the LIP program, the agency has not left the Medicaid expansion issue behind. CMS sent a letter to Justin Senior, deputy secretary for Medicaid at the FAHCA, stating, "The decision about whether to expand Medicaid is a state option… regardless of whether a stay expands, uncompensated care pool funding should not pay for costs that would be covered by Medicaid expansion," according to the report.

More articles on healthcare finance:

New York City hospitals say additional $1B needed for Medicaid reform initiative
Ascension, Banner, Kaiser, Mayo and UPMC's latest financial results
Hospitals challenge 'arbitrary and capricious' Medicare cut

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