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 Chairman 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 2025 Hospital Directed Payment Program (HDPP) and Low-Income Pool Program (LIP) and approval and delegation of authority to the Chairman to execute Letters of Agreement (LOA) and LOA questionnaires in substantially similar form with a combined amount not to exceed the levied assessment total in the Local Provider Participation Fund (LPPF) 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 Chairman 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 process collects up to a maximum of $355,646,140.00 to use as an IGT match for Pinellas hospitals.
• Funding in the amount of $172,706,390.00 has been initially included in the Fiscal Year (FY) 2026 Proposed Budget appropriation request to allow the LPPF to be passed through as IGTs to AHCA. Any IGT request over the additional FY26 appropriation will be require a budget amendment. The County will receive up to $150,000.00 for administration.
Body
Strategic Plan:
Healthy and Safe Communities
2.1 Improve Public Health
2.2 Enhance Community Safety
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. Statewide, without programs to reduce the shortfall, hospitals provide over $3.4 Billion in unreimbursed Medicaid costs and over $2.8 Billion in unreimbursed Charity Care each year.
To help close this reimbursement gap, the State of Florida and the Center for Medicare and Medicaid Services (CMS) authorized the HDPP and LIP programs to allow the use of IGTs to help draw down enhanced funding for hospitals.
The HDPP allows match funds to be used to draw down federal Medicaid dollars and enhance direct payments to hospitals through Managed Care Organizations (MCOs) for Medicaid services. The LIP program is designed to reduce charity care impacts for uninsured populations by drawing down reimbursement funding directly, however, due to historical lack of available IGTs, significant funding is left undistributed each year.
While public hospitals are able to contribute IGTs directly to the state, for non-public hospitals, county governments must establish a LPPF and levy a non-ad valorem assessment to send the IGTs to AHCA.
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.
Through Pinellas County’s participation in the 2024 program, the previous adopted assessment in September 2024 allowed for $151.1 Million in IGTs to be collected with anticipated gross reimbursements to the hospitals totaling over $309.9 Million. Hospitals have reported that these reimbursements have allowed for enhanced emergency behavioral services, increased operating capacity, updated technology for improved healthcare delivery, improved maternal and infant outcomes, ability to attract skilled staff, overall access to services, and other benefits for Pinellas residents.
For the 2025 program, assessment rates are proposed in an amount not to exceed $355,646,140.00 (18.46% of Inpatient Net Patient Revenue without Medicare and 1.61% of Outpatient Gross Patient Revenue) to allow local hospitals to maximize their program participation in alignment with State of Florida and CMS approved future program rates. These maximum rates are presented for approval on June 17, 2025 to allow their inclusion to be grandfathered into future program levels set by the State each year.
To participate in the 2025 program, the assessment resolution must be adopted to set the maximum rates, with assessments to be collected in the LPPF upon receipt of program participation levels, and final LOAs/LOA questionnaires from AHCA will need to be executed by September 30, 2025. Each year, the timing of the LOAs received from the State does not allow sufficient time to be placed on the Board agenda, necessitating delegation to the Chair for signature.
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 total in the LPPF to allow the funds to be sent as IGTs to AHCA as match to enhance Medicaid reimbursements.
The County has received letters of support representing 15 of the 16 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 20-day notification for the June 17, 2025 Board Meeting. Additionally, required 20-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 the state HDPP.
Florida first authorized the HDPP through the General Appropriations Act Senate Bill 2500 in the 2021 Legislative Session. Over 27 jurisdictions have implemented the HDPP 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 LIP 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 2025, Pinellas County has received indication that all local hospitals are interested in participating in the HDPP and the LIP.
The final proposed assessment model for Medicaid region five (5) will impose assessments on reported patient revenues in an amount not to exceed $355,646,140.00 affecting 15 Pinellas hospital properties, covering 16 hospitals with Largo Medical Center - Indian Rocks included within the Largo Medical Center revenue reporting and assessment.
• AdventHealth North Pinellas $11,953,785
• Baycare Alliant Hospital $1,363,846
• Mease Countryside Hospital $35,643,216
• Mease Dunedin Hospital $9,105,999
• Morton Plant Hospital $62,205,680
• St. Anthony’s Hospital $36,624,834
• Encompass Rehabilitation Hospital of Largo $894,738
• Largo Medical Center $42,841,822
• Northside Hospital $20,697,071
• Palms of Pasadena Hospital $11,513,276
• St. Petersburg General Hospital $18,670,083
• All Children’s Hospital $69,816,193
• Kindred Hospital - Bay Area - St. Petersburg $1,778,027
• Bayfront Health - St. Petersburg $30,167,697
• Windmoor Healthcare of Clearwater $2,372,873
The Pinellas County Clerk of the Circuit Court will invoice and collect the funds into the LPPF upon receipt of program participation levels. Funds in the amount of $172,706,390.00 have been included in the FY26 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 HDPP 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 $355,646,140.00 affecting 16 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 $172,706,390.00 has been included in the FY26 Proposed Budget appropriation request to support this program and allow the funds collected into the LPPF to be passed through as IGTs to AHCA. Any IGT request over the additional FY26 appropriation will require a budget amendment.
An administrative fee 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 AATF
Example Letter of Agreement with AHCA for Hospital Directed Payment Program
Example Letter of Agreement with AHCA for Low Income Pool
Example IGT Questionnaire Certification for Hospital Directed Payment Program
Example IGT Questionnaire Certification for Low Income Pool
Pinellas County LPPF 2025 Assessment Calculations
Combined Hospital Indemnifications and Releases
Combined Hospital Petition Requests for Assessments
Region 5 Provider List
Adopted Ordinance 24-16 Establishing Local Provider Participation Fund
Pinellas County Hospital Assessment Overview
Overview of Hospital Directed Payment Program
Florida Hospital Association Issue Brief on HDPP March 2023
Low Income Pool Background - AHCA