Flagler Mulls Joining Lawsuit Against
Florida Over Reduction in Medicaid Payments

In what it described as an “accounting mess,” the Florida Association of Counties said Thursday it will file a lawsuit challenging the state’s decision to try to tap counties for tens of millions of dollars in disputed Medicaid money. Flagler County commissioners will decide whether to join the lawsuit at their meeting Monday.

The county association’s decision came two weeks after Gov. Rick Scott signed a bill that calls for the state to recoup an estimated $325 million in disputed bills— and more than a month after counties frantically tried to fend off the measure in the Legislature.

Legislative leaders contend that counties have failed to pay money that is owed to the state. But counties argue the state’s billing system has major flaws, which has led to payment disputes.

Last year, County Spokesman Carl Laundrie summarized in a written statement, “Flagler County paid $419,448 to help cover the cost for Florida’s share of Medicaid. Medicaid provides assistance to people who do not have the means to pay for medical care. The state of Florida is asking Flagler County taxpayers to pay an additional $334,000 for the states’ Medicaid accounting errors of which, many are disputed. This means that Flagler taxpayers are being asked to pay a total this year of $755,449.”

“From the outset, we’ve said that local taxpayers shouldn’t be forced to pay for Tallahassee’s accounting errors,” Chris Holley, executive director of the Florida Association of Counties, said in Thursday’s announcement of the upcoming lawsuit. “And to ensure that they are not, we will be pursuing legal action.”

Pasco, Polk, Manatee and Leon counties have voted to join the suit, and the association said it expects more counties to take part. If Flagler were to join, it would only cost the county $1,000 in legal costs, assuming the association considers Flagler a small, rural county. If the association categorizes Flagler as a medium county, the one-time flat charge would be $3,500. (Large, urban counties would pay $5,000.) The association picks up all remaining costs. It has hired Susan Churuti and Tom Drage of Bryant, Miller & Olive, a Tallahassee law firm, the represent the counties. Both are former county attorneys.

The dispute stems from a requirement that counties reimburse the state for certain hospital and nursing-home costs for Medicaid beneficiaries. The Agency for Health Care Administration bills the counties for the money.

Legislative leaders argue that counties during the past few years have substantially reduced the percentage of bills paid, with legislative staff analyses indicating unpaid billings totaled as much as $325.5 million as of Dec. 31. Flagler’s share is not clear.

The bill (HB 5301) calls for the state to gradually recoup money from the counties. A House staff analysis last month said the measure is expected to bring in $77.5 million for the state during the fiscal year that starts July 1.

In finalizing the budget last month, Senate Budget Chairman JD Alexander, R-Lake Wales, said counties could go through an administrative-hearing process if they want to contest the amounts that the state tries to collect. But he was unmoved by the counties’ objections to the bill.

“They should have been paying it all along, and it wouldn’t be a problem today,” Alexander said at the time.

But counties contend that the state started using a computer system in 2008 that has created inaccurate billings. As an example, counties say they have seen duplicative charges and incorrect rates.

In signing the bill March 29, Scott said AHCA staff would travel to all counties to try to resolve issues with the billing process. Information on the Florida Association of Counties website indicates those meetings started last week.

But in the statement Thursday, Holley said the counties still needed to go forward with the legal challenge, which will be filed in Leon County circuit court. The association contends that the state law enabling the state to withhold county revenue from counties’ sales tax revenue distribution violates three constitutional provisions that forbid the Legislature from imposing unfunded mandates on counties. First, a two-thirds vote in both chambers of the Legislature was required to compel cities and counties to be bound by the bill; second, a two-thirds vote was required for any action reducing counties’ and cities’ revenue. Third, the constitution “prohibits the enactment, amendment or repeal of any general law that is anticipated to reduce the percentage of a state tax shared with counties and municipalities,” the association concludes.

“We appreciate the governor’s promise to address these systemic Medicaid billing errors,” Holley said. “However, HB 5301 has made this multimillion-dollar accounting mess the law of the land — a reality we are forced to confront in the courtroom on behalf of Florida’s communities and taxpayers.”

–FlaglerLive and the News Service of Florida