County seeks to offset hospital Medicaid shortfall

The Marion County Commission unanimously approved an ordinance earlier this month that would create a non-ad valorem special assessment on county hospitals to help them cover Medicaid shortfalls.

But only three of the five hospitals in the county have signed onto the plan, threatening its implementation. Ocala Regional Medical Center and West Marion Community Hospital are the the holdouts. Both are owned by HCA Healthcare and operate under the Ocala Health name.

The proposed assessment would allow the hospitals to receive federal funds from the Medicaid Directed Payment Program (MDPP) through the Local Provider Participation Fund (LPPF), a fund-matching program designed to offset the “Medicaid gap,” or the financial shortfall hospitals experience when they treat patients who are enrolled in the Medicaid program.

“Medicaid on average covers only 60% of the cost of the healthcare services provided by hospitals to Medicaid-eligible persons,” said Joe Johnson, AdventHealth Ocala CEO.

Johnson expressed his support for the proposed ordinance during the meeting.

“This program would allow us to continue our partnership with the county in providing care to those in with the greatest need,” he said.

Mike Tacke, CEO of The Vines Hospital also expressed his support during the meeting and detailed how the funds would benefit his hospital.

“One of the biggest challenges at The Vines is we try to keep up with the growing behavioral health demand needs of a growing community in Marion County…[we] try to attract licensed clinicians, nurses, psychiatrists to our community, and so having access to these matching funds would allow us to keep pace with and to compete with communities like Orlando and Gainesville, and out of state,” Tacke said.

He went on to note that “67% of our overhead at The Vines is in our staffing costs, and so that money would help us target that initiative.”

Encompass Health Rehabilitation Hospital of Ocala, sent a letter to the county stating they had no objections to the proposed ordinance.

Absent from the meeting, however, were representatives from Ocala Health.

In order to join the program, all county hospitals must agree to participate.

Commissioner Kathy Bryant proposed continuing the public hearing through their next meeting in order to hear from all health systems involved, however, Commission Chairman Jeff Gold pointed out the county made several attempts to contact the hospitals.

“They’ve chosen not to reply at this point. It is my read on this, to see what happens,” said Commissioner Michelle Stone.

The two Ocala Health hospitals can still decide to join the program as the legislative process continues. Ocala Health did not immediately respond to a request for comment regarding the program.

Bryant did express concern that Marion County might not get back what it puts in. The funds are collected from hospitals in participating counties and then sent to the Agency for Health Care Administration (AHCA), the state agency tasked with managing Florida’s Medicaid program. AHCA then provides the money collected to the federal government, which in turn delivers matching funds to AHCA, which then disperses it back to the hospitals.

Bryant’s worry is that AHCA divides the state into eleven regions, and the funds collected are dispersed back throughout the AHCA regions they came from rather than from each individual county.

Carlos Zaffirini, the President of Adelanto HealthCare Ventures (AHCV), a consulting firm that collaborated with AdventHealth and Marion County on the proposed ordinance said “the math has to work” for the hospitals to be interested in taking part in the program. Hospitals would not support a program where they don’t see a benefit, he said.

While the MDPP has been around for some time nationally, it’s relatively new to Florida. Johnson pointed out during the meeting that AdventHealth hospitals in Texas have been using the program for some time and were pleased with the results.

Even if the two holdout hospital do eventually decide to participate, there is still a chance that Marion County hospitals do not receive matching funds this year. Multiple counties within an AHCA region must also agree to take part in the program.

Zaffirini said several counties within Maron’s region – Region 3 – are currently considering the same program. The counties in Region 3 include, Alachua, Bradford, Citrus, Columbia, Dixie, Gilchrist, Hamilton, Hernando, Lafayette, Lake, Levy, Putnam, Sumter, Suwannee, and Union

“It’s pretty common these days as a way to fund the safety net” he said.

The assessment would only apply to the five hospitals in the county, meaning no residents or local businesses would be subject to the assessment.

If all five hospitals eventually agree to join the program and agree to a uniform rate of assessment set by the county, the county would pass resolutions announcing the rate. The first assessment would come sometime in September or October.

More information on the DPP and LPPF can be found at floridataxwatch.org.