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Nancy Smith

CMS to Florida: We Can Provide Our Share of $1 Billion for LIP

May 20, 2015 - 6:00pm

In a letter sent to the state today, the Centers for Medicare and Medicaid Services (CMS) has said it will provide Florida with a portion of $1 billion in LIP funding for 2015-2015.

"CMS believes that reaching the appropriate level of LIP support, consistent with the principles articulated in CMS April 2015 letter, is best implemented through a phased-in approach," according to a heads-up email received from the U.S. Department of Health and Human Services.

"We have preliminarily concluded that the appropriate level of funding for 2015-2016 should be approximately $1 billion, which would help maintain stability for the system and providers while the state creates alternative financing arrangements," the email reads. "From its inception in 2006 until 2013, LIP funding was capped at $1 billion each year."

Speaker Steve Crisafulli, has already advised House members.

"We received news through media reports that CMS has issued a letter to AHCA providing information on the federal governments decision on funding for the Low Income Pool. We are reviewing the letter and seeking additional clarification from AHCA and CMS. I look forward to providing you information as soon as I can," Crisafulli told members.

"Until then, I believe the clear indication before the special session is Florida will receive a significant level of LIP funds," he said, "which will help us in our efforts to finish the budget by the July 1 deadline."

Senate President Andy Gardiner also issued a response to senators:

"... In summary, CMS has outlined a step back to the traditional (pre-2014) level of LIP funding," Gardiner said. "This $1 billion in total LIP spending authority represents less than half of the current year authority of $2.2 billion. Additionally, CMS believes allowing this level for the 2015-16 fiscal year will help Florida transition to a base level of $600 million in subsequent years.

"This news brings certainty to what we have known for over a year the LIP program is changing and Florida needs a new way to address uncompensated care," Gardiner said.

"Throughout the 2015 regular session, the Senate used a conservative approach to budgeting, setting aside funding to prepare for a decline in LIP. These additional state dollars allow Florida to mitigate the loss of LIP funding in the short term," he pointed out. "However, as explained by our state economist Amy Baker, using state dollars to replace federal funding forces us to supplant other priorities and damages our economy.

"It remains clear that a sustainable long-term solution is needed. As you are aware, the Senate has proposed a Florida solution that will promote the well-being of our constituents and protect the fiscal health of our state.

"While the letter from CMS outlines a number of policy alternatives, none of these options will allow Florida to maximize both state and federal taxpayer dollars in a more effective manner than by reducing the number of uninsured Floridians seeking basic health care in hospital emergency rooms. Clearly, a conservative free-market expansion of health care coverage is the most fiscally responsible approach.

Gardiner concluded, "While we may not agree with every policy decision that comes from the federal government, I do agree that coverage, rather than backend supplemental payments, is a better investment for our taxpayers. With todays direction from the federal government, we will continue to work towards a responsible long-term Florida solution. Special Session will give us the opportunity to address health care within the context of our budget. I look forward to seeing you on June 1."

Other details in HHS' advisory email are as follows:

  • "Our preliminary analysis indicates that $600 million is the appropriate amount to cover the states uncompensated care costs in FY 2016-2017.
  • "The $600 million for the LIP, coupled with options the state may elect at its discretion, would enable Florida to retain Medicaid investment in the state at or above the current $2.16 billion.
  • "The state can increase its federal funding for uncompensated care by making reforms that include:-- Increased payment rates to providers in order to better support Medicaid beneficiaries, and/orMedicaid expansion, which, as previously articulated, is a state decision that does not affect the size of LIP but can provide an estimated revenue increase of $2 billion annually to the Florida hospitals over and above the funding received through sources such as the LIP.
  • "We reiterated our position that we will not renew the states LIP in its current form.
  • The official approval of Floridas Low Income Pool program is subject to CMS formal review of the states final proposal, as well as public comments, and further conversations with the state."

This story is developing.

Reach Nancy Smith at or at 228-282-2423. Twitter: @NancyLBSmith

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