HCA, the for-profit health care system that Rick Scott once served as its CEO, has sent a letter to the governor offering a solution to replace the Low Income Pool.
HCA has 46 hospitals in Florida, including West Florida Hospital in Pensacola. It recommends that state increase base Medicaid payment rates for hospitals and has offered the possibility of increasing a hospital-provider tax to help finance the changes. Money collected through such a tax hike could be used to draw down additional federal Medicaid funding.
Scott co-founded Columbia Hospital Corporation, which merged with Hospital Corporation of America in 1989 to form Columbia/HCA. It eventually became the nation’s largest private for-profit health care company.
He resigned as Chief Executive of Columbia/HCA in 1997 amid a controversy over the company’s business and Medicare billing practices. HCA admitted to 14 felonies and agreed to pay the federal government over $600 million, the largest fraud settlement in U.S. history. Scott was not implicated and no charges were raised against him personally.
The HCA letter, dated May 15, came as a commission appointed by Scott prepares to meet Wednesday to begin work on health-care funding issues. It also came amid uncertainty about the $2.2 billion Low Income Pool program, which sends additional money to hospitals and other providers that care for poor and uninsured patients. The program, known as LIP, is scheduled to expire June 30 unless state and federal officials can reach agreement on an extension.
In the letter, HCA said it receives a disproportionately small amount of money through the Low Income Pool for the uncompensated care it provides—the benefit of being a for-profit entity that allows other facilities to care for the poor and uninsured. It said in the letter that money from increased Medicaid rates would be provided to hospitals through what is known in the industry as the “Diagnosis Related Group” system.
Florida’s Medicaid program moved to that system, which involves a complicated formula, in 2013. Broadly, the idea of the system is to classify patients based on factors such as their diagnoses or types of treatments. Those classifications are used to calculate payment amounts designed to more closely reflect the costs of treating patients.
In the letter to Scott, HCA said increasing the base Medicaid rates and hiking the hospital tax would “provide an equitable increase in Medicaid funding that will serve to offset much of the loss of LIP funds for charity and uninsured patients.”
—sources The News Service of Florida and Wikipedia