Federal Government Calls Gov. Scott’s Lawsuit Over Medicaid Expansion “Baseless”

Describing the state’s arguments as “baseless,” federal officials this week fired back in court against Gov. Rick Scott’s contention that the Obama administration has unconstitutionally tried to link expanding Medicaid with the continuation of a key health-care funding program.

In documents filed late Monday in federal court in Pensacola, the U.S. Department of Health and Human Services gave its first detailed accounting of talks with Scott and other state officials about the Medicaid issue and the continuation of the Low Income Pool funding program. The filings deny Scott’s argument that the Obama administration has tried to coerce Florida into expanding Medicaid.

Top federal Medicaid official Vikki Wachino said in one of the documents that she attended a May 6 meeting between Scott and U.S. Department of Health and Human Services Secretary Sylvia Burwell. She said the federal government took issue with details of a state proposal for continuing the so-called LIP program after June 30 — but decisions about the program were not tied to expanding Medicaid.

“At that meeting, Secretary Burwell stated expressly that Medicaid expansion is a state decision and that whether or not a state receives federal funding for an uncompensated care pool (LIP) does not depend on whether that state expands,” Wachino said in the document. “She also said that HHS was not saying there would not be a LIP program but instead that it needed to be altered.”

A day after the May 6 meeting, the state filed a motion in court seeking a preliminary injunction to block federal officials from linking the issues, contending that Washington was trying to “hold LIP funding hostage to Medicaid expansion.” LIP, which totals nearly $2.2 billion this year, provides additional Medicaid funds to hospitals and other health-care providers that serve large numbers of low-income patients.

“By refusing to continue funding a multibillion-dollar Medicaid program that offsets the costs of uncompensated health care provided by safety-net hospitals and trauma centers, children’s hospitals, medical schools, and other providers statewide unless and until Florida agrees to opt into the Affordable Care Act’s Medicaid expansion program, the federal government has engaged in unconstitutional coercion,” attorneys for the state wrote in the May 7 motion for a preliminary injunction.

Scott filed the lawsuit April 28 amid a state budget impasse that has stemmed from questions about the future of the LIP program and a dispute between the House and Senate about whether to offer private health-insurance coverage to hundreds of thousands of low-income people. The Senate has pushed the expansion plan, which would use federal Medicaid money available under the Affordable Care Act, better known as Obamacare — though Senate leaders contend the plan wouldn’t be an expansion of Medicaid.

The documents filed Monday by the federal government responded to the state’s motion for a preliminary injunction in the case. But the documents also noted that federal officials notified Florida on May 21 that it could expect to receive about $1 billion for the LIP program in the fiscal year that starts July 1, without the money depending on Medicaid expansion.

State lawmakers started a special legislative session Monday and are expected to use the $1 billion figure as they negotiate a budget for the upcoming year. The Senate has continued pushing the health-care expansion plan, which continues to be adamantly opposed by Scott and the House.

“CMS’ (the federal Centers for Medicare & Medicaid Services’) letter to Florida of May 21, 2015 further confirms defendants’ continued openness to consider approval of a LIP program in Florida with reasonable reforms, regardless of Medicaid expansion,” federal attorneys wrote in one of the documents.

The documents also give a glimpse of sometimes-strained relations between federal and state officials. As an example, the documents pointed to a statement issued April 1 by Florida Agency for Health Care Administration Secretary Liz Dudek, who said the state had been notified the day before that top federal Medicaid official Eliot Fishman would not be available for further LIP negotiations for two weeks.

“This was sudden and disappointing news,” Dudek said in the April 1 statement. “AHCA’s conversations with CMS had been productive and positive until this point. For CMS to discontinue LIP negotiations now is troubling and could signal the abrupt end of this federal health-care program in Florida.”

But in one of the court documents, Fishman said he had notified the state beforehand that he would be unavailable because of a “long-scheduled vacation to Europe and then to Israel for Passover.” He also said he had told state officials they could talk with his senior policy adviser “who was intimately familiar with the Florida discussions.”

Wachino recounted in another document that she made an “unscheduled call” April 2 to state Medicaid director Justin Senior because of the Dudek statement. She said she told Senior federal officials were considering LIP information submitted by the state.

“I also told Mr. Senior that it was highly unusual for a state official to issue a press release when a CMS employee was taking a scheduled vacation,” Wachino said in the document. “Mr. Senior responded that the length of Mr. Fishman’s vacation came as a surprise to him. I assured Mr. Senior that CMS was considering the general approaches (about LIP) that Florida had given to CMS and would get back to Florida with general feedback on the approaches Florida was suggesting.”

–Jim Saunders, News Service of Florida