Florida Seeks Recovery of Nearly $100M in Medicaid Reimbursements from HHS

The Florida Agency for Health Care Administration (AHCA) is suing the United States Department of Health and Human Services (HHS) and HHS Secretary Xavier Becerra to recover almost $100 million in Medicaid reimbursements that the state believes it is owed.

According to the complaint, the Centers for Medicare & Medicaid Services (CMS) refused to reimburse the state of Florida for $97,570,183 in Medicaid payments — specifically disproportionate share hospital (DSH) and low-income pool (LIP) payments — the state made to health care providers from July 1, 2006, through June 30, 2013. The Social Security Act sets a ceiling for how much CMS can reimburse hospitals statewide in DSH payments, and the LIP payment ceiling is calculated by a different method as a supplement to hospitals and other providers that provide services to high numbers of uninsured or underinsured individuals or those on Medicaid.

Florida’s dispute over its payments arose from an HHS Departmental Appeals Board final administrative decision that determined third-party payments to hospitals should be deducted from the LIP equation, effectively lowering the ceiling on what CMS can reimburse hospitals. The plaintiff argued that deducting third-party contributions actually goes against what CMS had advised in a December 2018 announcement.

DSH and LIP payments are meant to be a financial cushion for hospitals and other health care providers that render services to low-income and vulnerable individuals. The complaint noted that the majority of payments the state wants to recover originate from Jackson Memorial Hospital, “the largest provider of safety net services to Medicaid patients, the uninsured, and the underinsured.”

Alleging that the disallowance of the near-$100 million in reimbursements was “arbitrary and capricious, an abuse of discretion, and contrary to law,” particularly the Social Security Act, the state is requesting a declaration in its favor and for the denied reimbursement to be recovered.