Shands among safety net hospitals saying state underpaid them


Published: Friday, August 8, 2014 at 4:47 p.m.
Last Modified: Friday, August 8, 2014 at 4:47 p.m.

UF Health Shands Hospital and several other safety net hospital systems in Florida say the state has underpaid them a combined $73.3 million for Medicaid patient care over a 13-year period.

Shands and UF Health Jacksonville each say the Florida Agency for Health Care Administration owes them $10 million for the period stretching from July 2000 through June 2013, according to complaints filed with the Department of Administrative Hearings.

Jackson Memorial Hospital, Orlando Health Inc., the South Broward Hospital District and North Broward Hospital also have filed cases saying they were underpaid.

All the hospitals involved are members of the Safety Net Hospital Alliance of Florida, a group representing facilities that handle a large amount of charity care and Medicaid patients.

Their claims against the state also challenge the Florida Administrative Code rule that sets out the complicated formula for determining reimbursement amounts for Medicaid care. The hospitals all say that, in determining those amounts, ACHA treated some hospital expenses that should have been variable costs as fixed costs.

As a result, instead of being inflated in the reimbursement formula, those costs were subject to depreciation, leading to the reduced payments to the hospitals.

“They are not paying us the full cost of providing services as it is through Medicaid and then less than what the state plan dictates,” UF Health Shands Senior Vice President and Chief Financial Officer Bill Robinson said. “It's an important number to us, but it's a fraction of the Medicaid business going back and forth between us and the state.”

Robinson said in a given year the hospital receives $220 million in Medicaid payments from the state.

In an email, AHCA press secretary Shelisha Coleman said the agency does not comment on active litigation.

The hospitals began filing claims in October 2013. All their claims have now been consolidated into a single case. A hearing before a Tallahassee administrative judge is scheduled for Sept. 15.

On Tuesday, ACHA filed paperwork seeking a continuance to the week of Nov. 17-21. The agency cited the “complexity of the issues” in the case as the reason for the continuance and said the agency and its outside legal counsel “would not be able to be adequately prepared by September 15.”

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