The Shadow Endures: COVID-19 and the Florida Healthcare Budget

Published in South Florida Hospital and Healthcare Association Newsline –

The specter of the novel coronavirus was just a pale shadow as the Florida Legislature held its sine die (dropping-the-handkerchief) ceremony on March 19, 2020, in the hallowed halls of the Florida Legislative Chambers.  The Legislature had worked harmoniously to pass significant healthcare legislation and to deliver its constitutional mandate, a balanced budget for the 2020-2021 fiscal year, even in the wake of the emerging COVID-19 threat.  The Legislature’s proposed budget totaled $93.2 billion, the largest in the state’s history.  In addition, major health care legislative accomplishments included:

• An expanded scope of practice for advanced practice nurses, in the hopes of improving access to primary care for Floridians;
• The ability for qualified pharmacists to enter into collaborative practice arrangements with physicians to simplify and enhance the treatment of Floridians afflicted chronic conditions like asthma, arthritis, obesity, and tobacco use, as well as test for and treat ailments like the flu, strep throat, lice and skin conditions like ringworm and athlete’s foot;
• A mandate for essential providers (like academic medical centers and safety net hospitals) to contract with each Medicaid managed care plan in their region in order to participation in Low Income Pool or other supplemental payments.
• No Medicaid rate cuts and the continuation of current Medicaid reimbursement methodologies and rates for inpatient and outpatient hospital services.

In normal times, the Governor has 15 days to sign or veto legislation presented to him upon the conclusion of the legislative session. But these are not normal times, so, at the Governor’s request, the Legislature “held on” to some key legislation, allowing the Governor to focus his efforts on dealing with the effects of the virus.  But during that time, COVID-19 raged and Florida became the new national hotspot.  Tourism was dramatically affected, the economy was effectively shut down for a while, and it became increasingly apparent that the state would have a severe revenue shortfall in the coming fiscal year. 

Finally, the Legislature delivered its budget to the Governor on June 17, giving him two weeks to sign it or identify line item vetoes.  Faced with a bitter fiscal reality, the Governor made some difficult choices on June 29, two days before the beginning of the new Fiscal Year on July 1, 2020. Unfortunately, a few meritorious healthcare projects were vetoed, including a proposal to increase the wages of healthcare workers who provide services to those with developmental or intellectual disabilities, and a proposal to increase Medicaid rates for providers who care for people with disabilities in institutions. 

Even with the Governor’s vetoes, however, which totaled more than $1 billion, the state faces a potential budget gap.  Fortunately, the CARES Act, other federal legislation, and the ability to draw upon state reserves will help to plug the gap.  In addition, although he has been loath to do so, the Governor has the ability to call a Special Legislative Session to address current year budget challenges. The final $92.2 billion budget approved by the Governor, shown as a pie chart below, still has healthcare as the largest sector receiving state funding.¹