Members,

FHA is extremely pleased to report about current legislative budget proposals which were released today. This is the first step in the process to craft the state’s budget as individual subcommittees release their proposals.

For far too many years, legislative budget proposals have routinely included a variety of Medicaid reimbursement cuts to hospitals. FHA has been focused on building and strengthening relationships with state legislators and providing critical information about the role of hospitals and the current financial challenges affecting Florida’s hospitals. I am happy to share that the proposed budget released by the state Senate today DOES NOT INCLUDE ANY CUTS TO HOSPITAL MEDICAID REIMBURSEMENT and lawmakers have capitalized on several opportunities to enhance Medicaid funding for providers who treat Florida’s most vulnerable patients; including targeted behavioral health funding for community services, expansion of psychiatric beds, an enhanced rate for complex pediatric patients, and additional support for cancer treatments.

Today’s proposed budgets also continue funding for several key hospital priorities: $125 million for the LINE & PIPELINE Programs to expand the capacity of nurses, $126 million to expand community-based behavioral health services, and additional funding to support critical GME slots in Florida to retain the physicians we educate.

FHA has been front and center with lawmakers over multiple years to educate on the realities of Medicaid coverage and reimbursement, the severity of the existing workforce shortage, and the need for increased access to community behavioral health treatment. We have consistently utilized some of these key talking points:

• Hospitals have experienced a 5.3% decrease in operating margins during 2022. Hospital labor costs alone have grown by 45%
• Medicaid reimburses providers at roughly 60% of cost – and general revenue spending on hospital Medicaid reimbursement makes up only 4% of state GR spending.
• Florida needs access to more behavioral health providers with a provider to patient ratio of 550 – 1, among the worst in the country.

The latest General Revenue Conference held in March projects that the current year budget will have a surplus of $15.7B in General Revenue to be carried forward into the next fiscal year. The carry forward balance reflects approximately 1/3 of the General Revenue need for the State. This forecast is driven by consumer spending dramatically increasing sales tax collections far beyond those originally projected. Additionally there is $3.14B in the Budget Stabilization fund.

After several years of contending with proposed cuts to Medicaid reimbursement for care provided to Medicaid patients, we are pleased to see a budget that prioritizes critical health care services for Florida’s most vulnerable individuals. Thank you for your advocacy and we look forward to continuing to work together for a final state budget that supports a bright future for Florida’s healthcare delivery system.

FHA President & CEO Mary Mayhew issued the following statement:

“Florida hospitals deliver the high-quality care that Florida residents and visitors expect and deserve. But with hundreds of people moving to Florida daily, the demand for healthcare services is skyrocketing. As we think about the future of Florida, we must have strong and financially stable hospitals with a robust health care workforce. FHA is grateful to see the Florida Legislature’s investment in the state’s health care system, increased commitment to mental health and substance use disorder treatment, strengthening our pipeline of health care workers and making it more adorable for them to live and work in the Sunshine State. These meaningful investments are critical to Florida’s future economic vitality and to supporting a modern, sophisticated healthcare delivery system ready to provide worldclass care.”

Please review below for a summary and highlights of the budget proposals that have been released so far. I encourage you to contact us if you have any questions or comments.

INITIAL BUDGET REPORT
Senate Health & Human Services

This morning, the Senate Appropriations Subcommittees on Health and Human Services released its initial budget proposal for State Fiscal Year 2023-2024.

The Senate’s proposed Health and Human Services budget totals $47.3B, of which $14.8B is General Revenue, representing a decrease of $1.6B in total funds and a slight increase in General Revenue being allocated for HHS. This initial Senate proposal maintains the Medicaid Budget and considers the reduction in caseload due to the end of the Public Health Emergency (PHE) and the start of Medicaid redeterminations. Additionally, this budget factors in the step-down of the enhanced FMAP with the unwinding of the PHE.

Several other hospital funding additions are outlined below:

• $76M Childrens Hospital Reimbursement Rate Adjustment
• $143M for Graduate Medical Education (GME). Of which, the Senate allocated $50.2M in General Revenue
  • $93.8M to the Statewide Medicaid Residency Program
  • $30M for the Slots for Doctors Program
  • $15.5M in Additional funds for the GME Program
  • $4M for the Certified Addition Medicine Physician Program
• $20.9M for Public Hospital Physicians Supplemental Payments
• $3M to expand Forensic Bed Capacity and Operations at Apalachee Center, Lifestream, and Gracepoint

Highlights of Additional funding within the AHCA budget include:

• $29.7M representing a 15 percent rate increase for Community Mental Health and Substance Abuse Services
• $15M for Medicaid Pediatric Behavioral Health Services Provider Rate increase
• $19.3M representing a 10 percent increase for Durable Medical Equipment Providers
• $92.8M increase for Nursing Homes Quality rate component
• $31.9M for the Program of All-Inclusive Care for the Elderly (PACE) and its expansion
• The proposal also includes the modification of the Low-Income Pool program budget authority as proposed in the Governor’s recommended budget.

Highlights of the Department of Children and Families budget

• Continues the $126M recurring investment to expand community-based behavioral health through CAT, FIT, FACT teams and mobile response models.
• $19M for Homelessness Housing Opportunities
• $156M for Substance Abuse and Mental Health Block Grant
• $34M for Central Receiving Facilities
• $15.8M for Coordinated Opioid Recovery (CORE)
• $4.4M for Opioid Settlement – Bed Availability System
• $42.9M For Mental Health Treatment Bed Capacity Maintenance

Highlights of the Agency for Persons with Disabilities budget

• $79.6M to help support the Home and Community-Based Services Waitlist

Highlights of the Department of Health budget

• $3.5M additional Funding for Child Protection Teams
• $6.3M for the expansion of Maternal Health Improvement through coordinated telehealth
• $30.7M for School Health Services to provide more school nurses
• $8M for the Prevention of Opioid Misuse and Naloxone Saturation
• $5M for FDA-Approved Naloxone for Colleges and Universities
• $12M for Primary Care Health Professional Loan Repayment Program

INITIAL BUDGET PROPOSAL
House & Senate Education

House Higher Education Budget Highlights

• Continues $125 million for LINE & PIPELINE Programs
• $34M for EASE institutions that meet minimum performance standards and funds incentivized award amounts.
• $23M for workforce education. Provides increased funding to school district career colleges and technical centers to support career and technical education, apprenticeship and pre-apprenticeship programs, and other workforce workload needs
• $5M for Student Success In Career and Technical Education (CTE) Incentive Funds provides funds for a new performance incentives program, based on Career and Technical Education, for school districts and technical colleges.

Senate Education Budget Highlights

• Continues $125 million for LINE & PIPELINE Programs
• $44M for workforce education. Provides increased funding to school district career colleges and technical centers to support career and technical education, apprenticeship and pre-apprenticeship programs, and other workforce workload needs.
• $5M million for Student Success In Career and Technical Education (CTE) Incentive Funds provide funds for a new performance incentives program, based on Career and Technical Education, for school districts and technical colleges.
• $295M for Institutional Investment In University Performance Based Incentives, which provides funding for a new State University System Performance-Based Recruitment and Retention Incentive program.
• $83M for EASE institutions that meet minimum performance standards and funds an incentivized award amounts

We will continue to communicate with you as the House and Senate craft the state’s upcoming budget.

Thank you,

Mary C. Mayhew
President & CEO