A massive budget shortfall looms over the upcoming legislative session, which starts in March, as lawmakers and lobbyists think about what to push and what to temper.
For this fiscal year alone, legislators will most likely need to find another $1 billion in reductions. That’s on top of $1 billion they already slashed in a special session in October 2007 in what started out as a $71 billion budget for the 2007-08 fiscal year.
At the same time, the state faces an additional $1.5 billion shortfall in previously predicted tax revenues for the next budget year that begins July 1, 2008.
Those are sour numbers for healthcare reform advocates who would like to see mental health services beefed up, increased Medicaid reimbursements, and enhanced financial support for safety net clinics.
But other initiatives with minimal budget impact such as hospital cost transparency, mental health parity, and changes in the way mental illness is handled in the justice system stand a greater likelihood, according to several lobbyists.
An ominous foreshadowing of what to expect in March came in the early fall special session. Lawmakers chose to cut hospital services for legal, non-citizens under Medicaid as a way to save $14 million in the current budget. The reductions limit reimbursements to two days in a critical care unit unless the hospital can prove the patient would return in less than 48 hours if released.
“What’s happening with some of these cases is we’re having to send a truckload of medical files,” said Jan Gorrie, a lobbyist for the Safety Net Hospital Alliance of Florida, which represents 14 hospitals that serve about half of the state’s Medicaid population.
Gorrie said such policies that limit healthcare services to the medically needy are shortsighted during a time of recession. “It’s almost oxymoronic when people will have greater need for the programs,” she said. “It’s like a double whack to the safety net.”
Hospitals are bracing for impact both in terms of hits to Medicaid and the state’s low-income pool, which subsidizes health insurance premiums and pays certain providers for otherwise uncompensated care, said Ralph Glatfelter, senior vice president of the Florida Hospital Association. Overall hospital reimbursement under Medicaid declined in October by 1 percent for designated trauma centers and 3 percent for all other hospitals.
“When we get in a situation like we are in now with increases in Medicaid enrollment, you have a situation that only makes things worse,” Glatfelter said. “There is no other way for a hospital to make up that loss except for what they charge to those with private insurance and thus the conundrum. It’s a vicious cycle.”
There are indications, however, that lawmakers have the gumption to increase funding in certain areas. With additional money this year, four healthcare programs for children that comprise KidCare increased capacity for about 36,000 children.
Finding money for children’s health insurance was a promising sign for people such as Bob Sharpe, president of the Florida Council for Mental Illness, who hopes the state can find an estimated $20 million in 2008 to kick start reforms to community mental health services.
A recent report sponsored by the Florida Supreme Court suggests that instead of using money now spent on mental health treatment for prisoners deemed incompetent to stand trial, the state could better spend the money on intensive community-based mental health treatment. Along with $20 million in startup costs, the state could maintain the program with existing Medicaid dollars and $48 million currently spent on state mental health beds, Sharpe said.
“I’m optimistic,” Sharpe said. “I’ve had concerns in recent years because of revenue shortfalls, but the difference this time is that despite what’s forecasted to be a substantial budget deficit, there was a lot of bad press about the inability of the department to manage these programs and comply with state law. So it’s fresh in legislators’ minds.”
In another mental health initiative, Rep. Ed Homan (R-Tampa) plans to make an aggressive push for a mental health parity bill that has come up numerous times in the past 10 years. Most recently in 2007, a similar bill had more than 90 co-sponsors in the House out of 120 total members. But House Speaker Marco Rubio (R-Miami) refused to allow a vote on the floor, Homan said.
The bill that Homan plans to introduce in March would force insurers to provide mental health and substance abuse benefits on an equal bases as physical health benefits. Florida is one of four states in the country without a mental health parity law. Current law requires insurers to cover up to $1,000 in mental health benefits including up to six psychiatric visits.
Despite claims by BlueCross BlueShield of Florida that a mental health mandate would increase premiums, Homan said that two lobbyists from competing health plans told him privately that rates would actually decline because of savings on the medical side if mental health benefits were paid appropriately.
Mental health parity also saves businesses money in lost productivity, Homan said. So far, though, he’s yet to convince the Florida Chamber of Commerce, which has opposed the concept. “Dow Chemical instituted mental health parity and in three years, they said it saved $882 per employee per year,” Homan said.
Meanwhile, several other groups have laid out their priorities:
- A health insurance mandate for incoming college freshman topped a list of recommendations from the state’s Health Insurance Advisory Board.
- The Oregon Public Interest Research Group named hospital cost transparency as its highest priority for health care reform this session.
- The Florida Medical Association plans to lobby for increased Medicaid funding and to oppose any expanded scope-of-practice for medical specialists, said Lynne Takacs, director of communications and press relations.
Over at the Governor’s Office, top priorities include “removing red tape” in the state’s certificate of need process for new hospitals, collecting reports on medical errors, and the bulk purchasing of prescription drugs, according to a press release.
January 2008
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