Feds offer $1.6 billion to pay Florida hospitals' uncompensated care bills

The federal government is offering to authorize $1.6 billion to reimburse Florida's hospitals for uncompensated care, but that is still $3 billion short in a budget impasse that is threatening to shut down the government. Providers, including nursing homes, are interested to see whether it's a signal the government is amenable to helping other states deal with funding issues.

At the heart of the matter is the financial stress many states face because of an unprecedented expansion in Medicaid rolls under Obamacare, as well as an estimated 800,000 Florida residents who earn too much to qualify for Medicaid and too little to qualify for Obamacare subsidies, The New York Times reported.

The Obama Administration made a conditional offer of $1 billion last week, along with an additional $600 million check next year, citing the state's need for “guidance to complete its budget.” The funds will keep the state's Low-Income Pool program solvent, for now.

The announcement came after both chambers of the state Legislature deadlocked over how to close a $4 billion gap between their two budget proposals and recessed without a resolution. According to the newspaper, lawmakers have been deeply divided over the issue of funding uncompensated care for hospitals. A special session is scheduled to begin June 1 to address the budget.

Gov. Rick Scott (R) last year sued the administration, claiming it was coercing the state into agreeing to Medicaid expansion thereby withholding hospital funding. Scott once favored Medicaid expansion and now publicly opposes it.

The Senate is pushing for a version of private-sector Medicaid expansion, local reports note.

Thirty states, including the District of Columbia, have adopted Medicaid expansion programs, according to the Henry J. Kaiser Family Foundation. More than 12 million people have signed up for Medicaid under the Affordable Care Act since January 2014. Many states that agreed to participate in the expansion, however, are now reeling from unexpected surges that already are straining their ability to pay for and provide services, Politico reported in a recent expose.