FL – State Legislators Approve $83B Budget

May 2017 ~

Following a three day extension, Florida House and Senate leaders have concluded this year’s legislative session with an agreed upon spending plan for FY 2017-18. A $82.4 billion budget ($30.9 billion general revenue) was approved for FY 2017-18, with $3.2 billion set aside in reserves.

While many are relieved that the majority of bills relating to health care were dropped from the final legislation, the final budget does include significant cuts to state hospitals funding. Highlights of the some of the major Medicaid issues in Florida’s FY 2017-18 Legislative Budget include:

  • Medicaid payment reductions to hospitals by $200 million in general revenue – equaling to $521.1 million with the federal share, including:
    • a -5%, $108.4 million reduction to the diagnosis related group (DRG) base rate;
    • a $412.6 million reduction in hospital rate enhancements (“add-on” payments).
  • $24.5 million pediatric adjustor for free-standing children’s hospitals and it makes the enhanced ambulatory patient grouping system (EAPGs) outpatient reimbursement effective July 1, 2017;
  • $1.5 billion to be allotted to the Agency for Health Care Administration (AHCA) to implement a Low Income Pool (LIP) subject to federal approval of the LIP special terms and conditions (STCs);
  • The appropriation of $264 million to continue medical school faculty physician supplemental payments;
  • Continues the All Patient Refined-Diagnosis Related Group (APR-DRG) reimbursement methodology for hospital inpatient services.

Major health care bills that were not passed included a proposal that would have provided more flexibility in health care known as “direct primary care” agreements as well as other House health care policies that centered on the deregulation of hospitals, hospices, nursing homes, trauma centers, and ambulatory surgical centers. As well, a bill to restructure the state’s Medicaid program was not approved that would have consolidated the program from 11 regions throughout the state into 8 larger regions and would have directed state health officials to contract with additional health plans for each region later this year.


Source(s): Tampa Bay Times; Becker’s Hospital CFO; Health Management Association; Miami Herald; News Talk Florida;