Legislature's Plan B to steal from Medicaid
By Florida Community Health Action Information Network staff
Money laundering involves the use of financial transactions to hide the source or destination of unlawfully gained money. Although the Legislature isn`t actually laundering money, that term aptly explains their latest maneuver in the ongoing effort to divert billions in federal stimulus money provided specifically to preserve Medicaid, even as they continue to cut the program.
As background, by this December, the Legislature will have received more than $5 billion in federal Medicaid stimulus funding. Almost half of that money will have been used to replace long-term State funding in Medicaid – far more than was necessary to save Medicaid – and diverted it for unrelated purposes. Almost $1 billion more is still anticipated for the second half of 2010-11, and the Legislature plans to do the same thing with those funds in the proposed State budget.
That isn't even the most alarming chapter of this story, however. Last spring, the Legislature placed $900 million of that diverted funding into State reserves. That action is specifically prohibited by the federal stimulus legislation (ARRA).
Last November, Florida CHAIN sent the federal Centers for Medicare and Medicaid Services (CMS) a detailed memo documenting that violation of the law and the impact it will have on Medicaid. In its March response, CMS indicated that it “takes [the] allegations very seriously” and was “directly investigating this matter directly with the State of Florida”.
One might presume that the result would be freed up Medicaid money and no need for any Medicaid cuts in 2010-11. However, in an act that appears to be equal parts defiance and deception, the Legislature simply tried to siphon off the money a different way – outside the reach of the feds.
More specifically, a vague line item tucked into the back of the proposed budget (page 411) supposedly appropriates that $900 million for “2009-10 Medicaid program costs.” For a number of reasons, however, including the following, the reality is that that money will never be used for Medicaid:
- This line item will become effective when the Governor signs the new budget at the end of May, but these funds can only be used for the current year (2009-10), which ends June 30. So the money is appropriated for 30 days, then disappears again.
- The money isn't assigned to any specific use, just to Medicaid generally. That is never done, and it's a clear indication that there is no intention that any of this money will actually be spent on Medicaid. At a minimum, State law requires that the Legislative Budget Commission more clearly spell out how the money is to be used, and that wouldn’t be resolved by June 30 anyway.
- This approach is in fact unconstitutional, as the Florida Constitution requires that budgeted amounts of this size include an itemized explanation of the specific use(s) beyond “Medicaid”.
The bottom line is that the Legislature intends to tell CMS that they now have made an attempt to spend the stimulus money for Medicaid, but money was left over (the same $900 million). And since there are supposedly no restrictions on the use of that leftover money, it can go right back into reserves, as the Legislature tried to do originally. This amounts to deliberate evasion of one law to avoid accountability for breaking another law, and all for the purpose of diverting funds needed to sustain the strained Medicaid system.