TALLAHASSEE, Fla. (NSF) - A top Florida health official on Monday disagreed with the findings of a draft federal audit that contends the state overpaid hundreds of millions to one of Florida’s biggest public hospitals and that $436 million should be returned to the federal government.
Agency for Health Care Administration Secretary Mary Mayhew said in a statement that the agency “disagrees with the findings” of the draft audit and that returning the money would impair Jackson Memorial Hospital’s ability to serve uninsured and poor patients in Miami-Dade County.
“Jackson Memorial has been a committed partner to the state of Florida, providing critical services to individuals and families as one of the largest safety net hospitals in the nation,” Mayhew said in a statement. “The current recommendations of the draft report would have devastating consequences on the hospital’s ability to serve our most vulnerable residents.”
Conducted by the Office of the Inspector General of the U.S. Department of Health and Human Services, the draft audit found that Florida improperly paid hundreds of millions of dollars to Jackson Memorial under the state’s Low Income Pool, or LIP, program.
Politico first reported the draft findings of the audit last week.
The LIP program is designed to funnel extra money to health-care providers that serve large numbers of low-income and uninsured patients. The LIP dollars can be spent on uncompensated costs of medical services.
From state fiscal years 2010 through 2014, hospitals received a total of $5.1 billion in LIP funds. Jackson Memorial received $1.8 billion of that total.
The state does not contribute any general revenue to the program. Funding comes from counties and hospital taxing districts that send money to the state. That money then draws down supplemental federal funds.
Much of that money has come from the publicly funded Jackson Memorial, which has then been one of the biggest benefactors of the LIP money.
Of the $1.8 billion in LIP payments made to the hospital during the audit period, auditors allege that Florida claimed $728 million erroneously, of which $436 million was paid by the federal government.
The majority of the $436 million was tied to unallowable costs for treating undocumented immigrants and providing outpatient care to prisoners, an international patient program and even day-care costs.
Mayhew, who was tapped from a position in the Trump administration by Gov. Ron DeSantis to run the Agency for Health Care Administration, defended the state’s spending in the program and noted that federal auditors made several calculation errors.
In a June 28 letter to the federal government, Mayhew said her overarching concern was that the auditors “used incomplete data when more appropriate data was readily available.”
Moreover, she said the audit failed to take into consideration a pending administrative appeal of a previous audit of LIP payments conducted by the federal government that also alleged overpayments.
“Instead of recognizing AHCA’s pending appeal and argument, the draft report leaves the misleading impression that it has identified hundreds of millions of additional overpayments, which is not the case,” she wrote in the letter.
Jackson Memorial did not comment on the latest draft audit findings.
Jackson spokeswoman Lidia V. Amoretti said that nearly 36 percent of the patients treated at the facility in 2018 were on Medicaid. Another 31 percent were on Medicare, about 19 percent were privately insured and another 14 percent were “self-paid.”
The LIP program is closely watched in Tallahassee, as it has been an important source of funding for Jackson and other hospitals across the state.
Republicans have held out supplemental programs such as LIP as a way to help health-care providers offset the largest costs of uncompensated care. But former President Barack Obama’s administration maintained that using Medicaid funds to offer health insurance was a better use of the money.
After Florida refused to expand Medicaid eligibility in 2015, the Obama administration announced it would eliminate the state’s LIP program, which was funded at the time at a high of $2.1 billion.
Then-Gov. Rick Scott, however, convinced the Trump administration in 2017 to extend the LIP program through 2022 at as much as $1.5 billion annually.