Hospitals Unlikely To Get All Of $1.5B in LIP Funding For Charity Care

By Julio Ochoa

Published August 11, 2017 at 5:21 PM EDT

The Safety Net Hospital Alliance of Florida supports the Senate budget proposal, which would bring in just over $21 million for hospitals in the Tampa Bay area.

Florida hospitals recently learned that an agreement between the state and federal governments will provide them with up to $1.5 billion to cover care for people who can’t pay.

But local governments will have to put up $559 million in matching funds before hospitals can access all of that money.

And because of the way the agreement is set up, it’s unlikely that the government funding, known as the Low Income Pool, or LIP, will ever reach $1.5 billion, according to Bruce Rueben, president of the Florida Hospital Association.

“The terms and conditions do not make it easy to raise that $559 million,” Rueben said. “That's a very, very significant level of local tax dollars to find.”

Counties used to get a return on investment as an incentive for providing matching funds, but that went away in 2015.

Now, there is no guarantee that the money local governments provide will be returned in a dollar for dollar match to their communities.

“You could have a local government put up this money and then if the other county governments don’t put it up, their local hospital could get less than their charity care covered and could get less than the county put up,” Rueben said.

That's because the money will be distributed to hospitals based on a formula, which health officials will try to develop during a meeting on Wednesday.

Compounding the problem is the fact that the legislature cut $521 million from the state's Medicaid program this year based on the promise of the LIP funding.

Hospitals already have a problem with being underpaid by Medicaid and more cuts won't help that, Rueben said. After 2015, hospitals were no longer allowed to offset the Medicaid underpayments with LIP money. That has the biggest impact on children’s hospitals, which serve a lot of Medicaid patients, Rueben said.

“Children’s hospitals have a real challenge with Medicaid underfunding … but this pool can’t pay them for that,” Rueben said.

Last year, the Low Income Pool was much less -- $608 million. The difference is, the legislature had not cut the Medicaid funding by $521 million, Rueben said.

Along with hospitals, Federally Qualified Health Centers, rural health clinics and medical-school physician practices also get some funding.