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As the 2007 Florida Legislative Session enters its final weeks, hospitals leaders are scrambling to address the Legislature’s actions – or inactions – on two priority items: funding the Low Income Pool (LIP) and addressing the sunset of Personal Injury Protection (PIP) insurance.

In a mid-session progress report released by the FHA, the combined financial hit on Florida’s hospitals exceeds $560 million in just the first year.

“We have two priority issues that the Legislature must resolve before the end of the session and they include fully funding the LIP program and solving the PIP impasse without inflicting damage to Florida’s trauma centers and emergency rooms,” said Wayne NeSmith, president of the Florida Hospital Association.

The federal government’s proposed LIP rule provides special Medicaid payments to Florida hospitals and nursing homes for the uninsured and underinsured, funded mostly through intergovernmental transfers (IGTs) from counties and federal match dollars. Loss of LIP funding would cost Florida hospitals 4.6 billion dollars throughout the next five years, according to the FHA.

A statutorily created advisory committee requested that the Legislature fill the gaping LIP hole with general revenue. The House did agree to provide $51 million for the program and another $30 million to the Department of Health (DOH) to be used as IGTs. (The DOH dollars are directed to be used for Shands Jacksonville and Jackson Memorial Hospital, Miami.)

The Senate’s version of the budget, however, contained no additional funding.

“Without fully funding LIP, the Legislature will remove the financial tools hospitals need to manage a growing uninsured population that is overwhelming our healthcare system,” NeSmith concluded.

The two chambers will begin ironing out their differences throughout the next few weeks. (For local affects, please see sidebar above.)



PIP repeal

The personal injury protection (PIP) impasse, which has yet to be resolved, concerns the future of insurance coverage injuries sustained in motor vehicle crashes. A survey by FHA of its members showed the potential direct and indirect impact of the loss of PIP coverage on hospitals and health insurers exceeds $350 million.

“The loss of PIP will have a disastrous impact on our state’s emergency rooms and trauma centers,” NeSmith said. “In a time when our healthcare system needs to be prepared for all emergencies, man-made or natural, the biggest threat we may face could come from legislative inaction.”

FHA supports a position that ensures hospitals, physicians, and trauma centers that treat patients involved in motor vehicle crashes will continue to be compensated for the life-saving care they deliver. The FHA PIP survey found that 40 percent of those injured in motor vehicle crashes had no other form of health insurance. The remaining 60 percent were covered by commercial health insurance, Medicare or Medicaid (see PIP Fast Facts sidebar).

“The result of legislative inaction will shift uncompensated costs to Florida’s hospitals and directly impact health insurance premiums by tens of millions of dollars,” NeSmith stressed.

The Legislature enacted significant no-fault reforms in 2001 and 2003 to address issues regarding fraud, abuse, inappropriate medical treatment, inflated claims, inadequate compensation to victims, increased premiums and the proliferation of law suits (see Auto Injury Claim Study sidebar below).

As a result of these concerns, in 2003, the Legislature repealed the Motor Vehicle No-Fault law, to take effect Oct. 1, 2007, unless re-enacted by the Legislature.



Fee cap controversy

In a last ditch effort to stave off the repeal, the Banking and Insurance Committee introduced a controversial bill, CS/SB 1880, which asks for re-enactment of the no-fault law and establishes a medical fee schedule based on the percentage of Medicare, along with additions reforms. The bill provides for the following:

• Reenacts Florida’s No-Fault Law, but provides for future repeal on Jan. 1, 2009;

• Allows insurers, under coverage for PIP, to apply a maximum limit on charges equal to 200 percent of the reimbursement allowed under the Medicare Part A (hospital insurance) or Medicare Part B (medical insurance) participating fee schedule in effect at the time for the region where the treatment is provided;

• If the treatment or services are not reimbursable under the Medicare fee schedules, insurers may apply a maximum limitation that is equal to the maximum reimburseable allowance under workers’ compensation;

• If the treatment or services are not reimbursable under either Medicare or workers’ compensation, they are not reimbursable by the insurer. However, this does not allow the insurer to apply any limit on the number of treatments or other utilization limits that apply under Medicare or workers’ compensation;

• Prohibits a provider from billing or attempting to collect from an insured any amount in excess of the fee schedule payment limit, other than amounts not covered by the insured’s PIP coverage due to deductibles, coinsurance amounts or maximum policy limits; and

• Removes existing fee schedules for specified medical procedures.

While in agreement with portions of the bill, the FHA and Florida Medical Association (FMA) are adamantly opposed to the provision that caps the amount insurers are required to pay hospitals and physicians to 200 percent of the federal poverty level. (There are no caps in PIP today.) According to the FMA, the fee schedule would cause physicians to lose money every time they treat a PIP patient.

To date, the House has failed to take up the issue and the Senate has delayed any further action as well.



Win some, lose some

Florida physicians did score a small victory on their fight to push back bill CS/SB 2002, which would allow pharmacists to administer vaccinations. Before advancing in the Senate, the Senate Health Regulation Committee significantly narrowed the reach of the bill to allow pharmacists to administer only influenza (flu shot) vaccines – not all vaccines.

However, House bill HB543 still allows for pharmacists to deliver any vaccine, although it also requires pharmacists to carry $200,000 in medical malpractice insurance.

The bills are advancing in both the House and Senate.



May 2007

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