Florida Medicaid program potentially has to return more than $965M to the federal government for owes federal government
A House committee has criticized the DeSantis administration for overspending by the state Agency for Health Care Administration, with one Republican estimating the liability at the state’s largest health agency might exceed $965 million.
Administrators conceded the agency has big problems.
“We have a lot to do as far as a complete overhaul, is kind of how I look at it, of documenting things and making sure we are documenting, mapping, and giving our employees the tools they need to go forward and be successful,” Lynn Smith, assistant deputy secretary for health finance, told members of the House Health Care Budget Subcommittee Wednesday.
GOP Rep. Hillary Cassel said she appreciated Smith’s candor but that the agency needs to do better.
“When we’re dealing with the level of funding that we’re dealing with and the population that we’re dealing with, we need to do our best to eliminate that as best as possible,” Cassel said.
Chairman Rep. Alex Andrade kicked off 90 minutes of tough questions from committee members Wednesday by conceding that cash management for the Medicaid program “is complicated,” entailing “multiple revenue sources from various federal grants, interest earning, refunds, transfers, accounting adjustments, and expenditure reporting.”
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Additionally, that the federal government sometimes attempts to claw back money it’s sent to the agency to help fund Medicaid, a safety net program for the poor, elderly, and disabled, he said.
“As we move forward with crafting the budget for the upcoming year, it is necessary for our subcommittee to have a thorough understanding of the cash management of the agency and analyze the impact of federal disallowances and improper accounting has on the health care budget,” Andrade said.
A lot of money
Committee members pressed Medicaid director Brian Meyer and Smith over a number of accounting errors and financing disputes Florida has had with the federal government that have resulted in “disallowances” — those clawbacks.
Florida Phoenix obtained a copy of a document prepared by AHCA that shows more than $965.6 million in potential liabilities, although Meyer stressed that the agency is in discussions with the federal government about the disputed amounts.
The disputes include the return of:
- $310,154,246 in ineligible Medicaid supplemental low-income pool payments made to Jackson Health System and other hospitals between 2009 and 2018;
- $320,495,618 in rebates from Medicaid managed care companies, back to 2015 when the statewide Medicaid managed care program was launched;
- $211,178,965 in drug rebates; and
- $123 million in children’s health insurance contributions, back 25 years ago.
When asked about some of the accounting errors, Smith mentioned two instances when the agency placed revenue in the wrong trust funds (she said there are eight trust funds in total). She attributed the mistakes to “human error, a failure of process, failure of communication.”
Smith discussed the agency’s accounting practices during the meeting.
“What I have found since I’ve been there, there are procedures and policies for some things. What I’ve found is they need to be updated, and we are doing that,” she said. “We have, based on recent events of transactions not being done properly, we have instituted new procedures for the team to follow.”
Rep. Mike Redondo, a Republican, and Rep. Mitch Rosenwald, a Democrat, both touched on audits — how often they are conducted and whether the results are shared with the committee, and whether the agency has a undergone a third-party outside audit during the past decade.
Smith and Meyer have been at the agency less than a year. Former Deputy Secretary for Data and Finance Tom Wallace unexpectedly resigned last year.
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