Subject:
Title
Resolution imposing and collecting a non-ad valorem special assessment levied solely on property owned or leased by non-public hospitals to fund the Hospital Directed Payment and Low-Income Pool Programs and approval and delegation of authority to the Chair to execute Letters of Agreement and Letters of Agreement questionnaires in substantially similar form with a combined amount not to exceed the levied assessment total to initiate Intergovernmental Transfers as match to enhance reimbursement levels for hospitals.
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Recommended Action:
Recommended Action
Conduct a public hearing and adopt the attached resolution imposing and collecting a non-ad valorem special assessment levied solely on property owned or leased by non-public hospitals to fund the 2024 Hospital Directed Payment Program (HDPP) and Low-Income Pool Program (LIP) and approval and delegation of authority to the Chair to execute Letters of Agreement (LOA) and LOA questionnaires in substantially similar form with a combined amount not to exceed the levied assessment total to initiate Intergovernmental Transfers (IGT) as match to enhance reimbursement for hospitals.
• This resolution establishes a non-ad valorem special assessment on specific non-public hospital properties for use as IGTs under HDPP and LIP as federal supplemental payment enhancement programs to help reduce local Medicaid and charity care reimbursement gaps.
• This item also includes approval and delegation of authority to the Chair to execute required LOA and LOA questionnaires that will allow the collected funds to be sent as IGTs to the Florida Agency for Healthcare Administration (AHCA).
• In alignment with Ordinance 24-16 adopted on April 23, 2024, the proposed non-ad valorem assessment will collect $151,115,221.00 to use as an IGT match for Pinellas hospitals.
• Funding in the amount of $119,364,340.00 has been included in the Fiscal Year 2025 Proposed Budget appropriation request to allow the LPPF to be passed through as IGTs to AHCA. A change is recommended to the Proposed Budget in the amount of $53,342,044.00 to include the LIP portion. The County will receive up to $150,000.00 for administration.
Body
Strategic Plan:
Ensure Public Health, Safety, and Welfare
2.1 Provide planning, coordination, prevention, and protective services to ensure a safe and secure community
Deliver First Class Services to the Public and Our Customers
5.2 Be responsible stewards of the public’s resources
5.3 Ensure effective and efficient delivery of county services and support
5.4 Strive to exceed customer expectations
Summary:
Summary
Local hospitals experience a significant gap in Medicaid reimbursements when delivering critical services for low income, vulnerable residents. Typically, the hospitals receive approximately 61% of their Medicaid costs with Pinellas hospitals estimating close to $200 million in unreimbursed costs each year.
To help close this reimbursement gap, the Center for Medicare and Medicaid Services (CMS) authorized the Hospital DPP allowing match funds to be used to draw down federal Medicaid dollars and enhance direct payments to hospitals through Managed Care Organizations (MCOs). While public hospitals are able to contribute IGTs directly to the state, for non-public hospitals, county governments must establish a Local Provider Participation Fund (LPPF) and levy a non-ad valorem assessment to send the IGTs to AHCA.
Additionally, hospitals across Florida devote roughly $3 billion in costs for uncompensated services for uninsured care. The LIP program is designed to reduce charity care impacts, however, due to a lack of available IGTs, significant funding is left undistributed. Pinellas Hospitals are requesting to include the LIP as part of the assessment to cover the IGTs under the program and enhance reimbursement amounts.
The State of Florida has initiated the programs for 2024 participation. To participate, the assessment resolution must be adopted, and final LOAs/LOA questionnaires from AHCA will need to be executed by September 30, 2024 necessitating delegation to the Chair for signature.
The Board adopted an ordinance to establish a LPPF and authorize the process for establishing the non-ad valorem special assessment in support of supplemental payment programs such as the HDPP and LIP on April 23, 2024.
This resolution establishes a non-ad valorem special assessment on specific non-public hospital properties for use as IGTs under the HDPP and LIP. This item also seeks approval and delegation to the Chair to execute the LOA and LOA Questionnaire in a combined amount not to exceed the levied assessment to allow the funds to be sent as IGTs to AHCA as match to enhance Medicaid reimbursements.
The proposed non-ad valorem assessment will impose assessments on reported patient revenues in the amount not to exceed $151,115,221.00 affecting sixteen non-public hospitals within the County to enhance Medicaid match. The Pinellas County Clerk of the Circuit Court will invoice and collect the funds into the LPPF until transferred to AHCA as IGTs.
The County has received letters of support from fifteen of the sixteen participating hospitals in Pinellas County with one hospital abstaining from providing a letter due to national policy. In addition, hospitals representing over 51% of the proportional assessments have provided signed and notarized agreements covering 100% indemnification for the County’s execution of the program.
A public hearing was advertised with required twenty-day notification for the September 5, 2024 Board Meeting. Additionally, required twenty-day mail notification for the public hearing was completed to the participating hospitals.
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Background Information:
CMS updated Medicaid Managed Care regulations to create an option for states to direct MCOs to pay providers according to specific rates or methods. This permitted the use of state directed payment arrangements. Each year, CMS reviews and approves state program.
Florida first authorized the Hospital DPP through the General Appropriations Act Senate Bill 2500 in the 2021 Legislative Session. Over 22 counties have implemented the Hospital DPP with local assessments collected for IGTs. Per CMS guidance and authorization, all non-public hospitals in a county must agree to participate in the assessment. Additionally, the Low-Income Pool Program, initially established in 2005, is authorized annually in the Florida General Appropriations Act to aid in reimbursing organizations for uncompensated, uninsured care that does not qualify for Medicaid. Under this program, hospitals currently miss out on a third of the allocated funds due to a lack of available IGTs. Participation allows hospitals to received enhanced rates to offset reimbursement gaps.
For 2024, Pinellas County has received indication that all local hospitals are interested in participating in the Hospital DPP and the LIP.
The final proposed non-ad valorem assessment will impose assessments on reported patient revenues in an amount not to exceed $151,115,221.00 affecting sixteen non-public hospitals within the County to enhance Medicaid match.
Based upon the 2024 Florida Uniform Reporting System, the final assessment model for Medicaid region five (5) would include fifteen (15) Pinellas hospitals:
• AdventHealth North Pinellas $5,616,218
• Baycare Alliant Hospital $641,288
• Mease Countryside Hospital $16,989,836
• Mease Dunedin Hospital $4,004,853
• Morton Plant Hospital $28,732,151
• St. Anthony’s Hospital $16,166,665
• Encompass Rehabilitation Hospital of Largo $420,711
• Largo Medical Center $13,605,605
• Northside Hospital $5,489,047
• Palms of Pasadena Hospital $2,979,794
• St. Petersburg General Hospital $4,148,155
• All Children’s Hospital $37,932,110
• Kindred Hospital - Bay Area - St. Petersburg $849,091
• Bayfront Health - St. Petersburg $12,404,011
• Windmoor Healthcare of Clearwater $1,135,686
Fifteen total properties are part of the proposed assessment covering sixteen hospitals with Largo Medical Center - Indian Rocks included within the Largo Medical Center revenue reporting and assessment. Pasco hospitals would be indirect beneficiaries of the process since local hospitals will seek to maximize the drawdown.
Following adoption of the resolution, the Pinellas County Clerk of the Circuit Court will invoice and collect the funds into the LPPF. The funds have been included in the FY25 budget appropriation request to support the transfers to AHCA as IGTs.
Pinellas County would need to adopt a new resolution each year to allow for authorization and continuation of the assessments for Hospital DPP and LIP. All non-public hospitals within the County must be part of the assessment in order to participate in this HDPP and LIP process.
Fiscal Impact:
The final proposed non-ad valorem assessment will impose assessments on reported patient revenues in an amount not to exceed $151,115,221.00 affecting sixteen non-public hospitals within the County to enhance Medicaid match. The funds collected from the special assessment will be neither a financial benefit nor a financial detriment to Pinellas County. The funds will be collected from the hospitals into the LPPF. Funding in the amount of $119,364,340.00 has been included in the FY25 Proposed Budget appropriation request to support this program and allow the funds collected into the LPPF to be passed through as IGTs to AHCA. A change to the Proposed Budget in the amount of $53,342,044.00 is recommended which includes the Low-Income Pool (LIP) portion contained in this item.
An administrative amount totaling $150,000.00 will be available to reimburse County efforts to support the program. Appropriate amendments will be proposed for these funds following completion of the assessment.
Staff Member Responsible:
Karen Yatchum, Director, Human Services
Partners:
Non-Public Hospitals
Florida Agency for Healthcare Administration
Attachments:
Proposed Resolution
Draft Letter of Agreement with AHCA for Hospital Directed Payment Program
Draft Letter of Agreement with AHCA for Low Income Pool
Draft IGT Questionnaire Certification
Pinellas County LPPF FY2024 Assessment Calculations
Combined Hospital Indemnification and Releases
Combined Hospital Petition Requests for Assessments
Region 5 Provider List
Adopted Ordinance 24-16 Establishing Local Provider Participation Fund
Overview of Hospital Directed Payment Program
Florida Hospital Association Issue Brief on HDPP March 2023
Low Income Pool Background - AHCA