Jackson Memorial could lose $140M under Medicaid reallocation

Jackson Memorial Hospital is on the losing side of a plan intended to make Medicaid funding more equitable among the hospitals in the Sunshine State.

Jackson, a safety net provider for Miami and the surrounding area, will likely lose $140 million a year--part of $218 million in Medicaid funds that state lawmakers will reallocate out of Miami's Dade County, according to the Miami Herald.

Lawmakers approved the reallocation in 2011. The plan establishes three tiers for the state's hospitals. The first tier includes children's hospitals, teaching hospitals and rural hospitals. They will receive 35 percent of the state's Medicaid money. The second tier includes hospitals in counties that collects taxes to cover some Medicaid expenses. In addition, second tier hospitals must have more than 9 percent of their patients enrolled in Medicaid. Like the tier one hospitals, these facilities will split 35 percent of the Medicaid dollars. Jackson Health is included in this group. The third tier includes all other hospitals that take Medicaid patients. They will receive 30 percent of the funds.

Officials say the loss of funding is a heavy blow for Jackson, which has struggled financially for years and has only recently brought a semblance of stability to its bottom lime. "That would be fairly catastrophic," Chief Executive Officer Carlos Migoya told the Miami Herald. "We're at a point right now where we are fairly efficient. It's not like we have a whole lot of extra fat to cut." The hospital's parent, Jackson Health, furloughed thousands of employees in 2011 in an effort to conserve cash.

Moreover, the new formula will put pressure on many counties that raise their own taxes to draw down Medicaid matching funds to stop the practice. Analysts with the state of Florida estimate that means the state could eventually lose another $565 million in Medicaid matching funds.

State lawmakers began to overhaul the state's Medicaid system in 2011 and 2012, and included sweeping changes in how the county reimburses the state for its Medicaid costs. The state has no plans to expand Medicaid eligibility under the Affordable Care Act, forgoing billions of dollars in additional program revenue.

Many lawmakers and hospitals leaders--including managers of hospitals in Broward County, a neighbor of Dade County that will likely benefit from the formula, concede that the formula is troubled, the Miami Herald reported.

To learn more:
- read the Miami Herald article