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Scott says he’s suing feds for withholding hospital funds

TALLAHASSEE — Gov. Rick Scott said Thursday he plans to sue President Barack Obama’s administration over what he calls a forced attempt to make the state expand Medicaid under Obamacare.

Scott issued a statement Thursday calling unconstitutional the efforts by the federal Centers of Medicare and Medicaid Services, which are part of Obama’s administration, to link $2.1 billion of so-called Low Income Pool money to expansion of Medicaid. Scott and House Republicans have opposed such expansion.

“Not only does President Obama’s end to LIP funding in Florida violate the law by crossing the line into a coercion tactic for Obamacare, it also threatens poor families,” reads a release from Scott’s office.

Scott is relying on a 2012 U.S. Supreme Court ruling that said the federal government could not use Obamacare — the federal Affordable Care Act — to force states to expand Medicaid. On Tuesday, federal officials sent a letter to the state formally linking LIP funding to expansion of Medicaid under Obama’s health care law.

Attorney General Pam Bondi confirmed she is working with the Scott administration to “explore our legal options to challenge the president’s gross overreach of power.”

LIP is a pot of federal and local money used by hospitals to provide charity care. It must be approved by the feds, and has been the subject of intense negotiations in recent months. The roughly $2 billion in LIP funding has halted the state’ final budget negotiations.

Legislative leaders on Tuesday said the impasse over LIP and expansion, which equates to a nearly $5 billion budget gap between the House and Senate, is likely going to lead to a special session to pass a final budget.

Senate President Andy Gardiner, R-Orlando, said Scott’s lawsuit is a “new wrinkle,” but did not think it would help the budget impasse.

“I’m not sure it solves the situation we are in where we have to have a balanced budget. We are prepared to extend or come back,” Gardiner said.

He also said there was a bit more flexibility in the Senate’s position, as House Speaker Steve Crisafulli, R-Merritt Island, says his chamber is not backing down from its opposition.

“If the caucus and members come to me and say it’s time for a different direction, I would certainly understand that,” Gardiner said.

The Senate has crafted a plan that would draw down nearly $50 billion in federal funding over eight years to provide Medicaid to 800,000 people. CMS has said it is “encouraged” by the plan, but House Republicans have blocked the legislation.

Both Scott and House leaders don’t trust federal officials will follow through with their funding promises, and now use LIP funding as an example.

Legal and policy experts were divided Thursday about the merits of Scott’s threatened suit, though all agreed that the state knew or should have known that LIP was going away.

“LIP was structured to be reduced and ultimately phased out, and that’s not unique to Florida,” said Steven G. Ullmann, director of the University of Miami’s Center for Health Sector Management and Policy. “But I think there’s just a cat and mouse game going on between Tallahassee and Washington right now.”

JoNel Newman, a University of Miami law professor and director of its Health Rights Clinic, suggested the lawsuit was more about politics than legal rights.

“Sometimes, lawsuits are political statements,” she said.

She questioned the Scott administration’s grounds for the suit, saying LIP is a “discretionary” fund that the federal government can choose to pay in full, in part or not at all.

Notwithstanding the Supreme Court decision, Newman said state policymakers “made certain choices with full knowledge” that LIP would be ending.

But Adam Levine, an adjunct professor at Stetson University College of Law, sided with Scott, calling the federal government’s actions “an inappropriate maneuver.” He echoed the House leadership’s argument that LIP and Medicaid expansion serve two different groups of patients, who sometimes but don’t always overlap.

“It’s unconscionable because what the feds are actually doing is threatening to take away health care money for one group of people if the state doesn’t expand (coverage) for another,” he said.

Ultimately, the losers in this fight could be poor and working poor Floridians – and their local hospitals, Ullmann said.

“The part that’s most concerning about this relates to the hospitals that serve those populations,” he said.

Opponents of expansion, including House Republicans and Scott’s office, have claimed for months that they thought LIP could be funded without Medicaid expansion because they were two separate issues. But a letter written in March by the state Agency for Health Care Administration called those claims into question Wednesday.

The letter from AHCA’s chief of staff appears to show the agency was aware the two issues were linked and were preparing for a messaging war once that link became public.

“CMS should not hold LIP hostage to an expansion decision,” the letter reads.

Staff writer James L. Rosica contributed to this report.

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