Doug Adkins: Budget Priorities and Healthcare

The budget meeting for the Nassau County BOCC yielded an interesting opportunity to examine budget priorities for the not for profits in Nassau County. While some not for profits are closely held organizations that perform little to no fundraising and others host community events and work on annual fund raising, and work to fulfill the public service mission of their organization – all of these not for profits help form what is called the “safety net provider network”.

The funding of the safety net provider network is driven in part by funding from general revenue dollars coming from state sources, grants and of course from the local BOCC budget. What is often not well understood is the fact that many of these safety net providers are also enrolled as Medicaid providers and some as Medicare providers. When run efficiently these safety net providers can and will often generate what is called in the not for profit world “surplus revenue” or earnings that are over and above the actual cost of providing the services. In the private sector you would call this “profit” and in many instance whether in private sector or not for profit you would reinvest those “surplus earnings” back into the care and needs of the people that you are serving. In fact this is a requirement under the Medicaid rules.

Since the Medicaid Reform plans have been implemented there are now 11,437 persons who are eligible for Medicaid in Nassau County. There are 6,479 under the age of 18 years and 4,958 adults being served. The Florida Medicaid Program has contracted with various health plans to provide health services and these health plans have developed provider networks to deliver services on their behalf to the individuals enrolled in their health plans.

This year the Medicaid Program has decided to issue invitations to negotiate new health plans and some of the health plans that were serving Nassau County (United and Molina) were not invited. Both of these plans will be able to appeal and might at the end of the day be able to keep their contracts but at this point the Medicaid Program has signaled they plan to negotiate contracts with health plans to delivered services in Nassau County.

One of the dynamics that has unfolded that many of the local not for profits and the BOCC has perhaps not factored into their budget calculation has been the “flight of Medicaid revenue” from Nassau County providers over the country line to Duval providers that are part of the health plan networks. Historically the amount of revenue from Medicaid services in Nassau County was around $45 million and that would provide services and it would also help support jobs, clinics and allow for the delivery of services. What many of the not for profit agencies would do is when they generated surplus earnings they would use that surplus earnings to help off set other areas or priorities where they did not have adequate funding.

One of the options available to the BOCC is to consider setting “rules” or crafting its own set of ordiances around Medicaid Reform. It would seem to make sense that if health plans want to contract with providers that are outside of Nassau County that this will adversely affect the ability of the safety net provider network to generate the traditional surplus earnings that have been relied upon to create the funding stream to cover other unfunded service priorities in the community. As a means of addressing this the BOCC could propose a “franchaise fee” that would allow it to collect a fee for the right to operate in Nassau County if that health plan chooses not to use the local safety network providers, this would allow the BOCC the ability to “clawback” from the health plans the revenues that otherwise would have been used to help support the safety net infrastructure in Nassau County and allow them to use these funds to improve access to care for those who are low income, perhaps Medicaid eligible but need help now until benefits are available.

Absent the legislature (Senator Bean and Rep Byrd) taking away local control from the BOCC or the municipalities on this issue they are free to set rules and to develop standards that add to and strengthen the system of care for the citizens in Nassau County. There are very few duties spelled out in our State Constitution for the County Commissioners but the health, safety and well being of the citizens is one of the primary responsibilities. Until the legislature encroaches upon the legal authority of the local government to adopt rules and create its own ordinances to help strengthen its system of care and set standards, it would be in the broad interests of the public for the BOCC to consider some steps that might include a closer look at how the Medicaid pie is divided and to understand how Nassau County safety net providers have “lost ground” in Medicaid Reform and who has benefitted from this realignment of resources.

In South Florida the local municipalities and counties have had to create health care taxing districts to help underwrite and fund the access to health care services for the low income and elderly in those communities. The framework for these healthcare taxing districts create new layers of taxation and new burdens for homeowners that make life for expensive. The addition of new taxes and a healthcare taxing district is a measure of last resort.

I believe that Nassau County needs to pursue the development of a federally qualified health clinic which would allow for access to low cost medications under the 340B drug pricing system and would also create better access for the service sector workers that are often have no health insurance and need access to health care at affordable rates. The establishment of an FQHC should be our top health care priority in Nassau County or in the City of Fernandina Beach which has a growing senior population.

Douglas D. Adkins
Fernandina Beach

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One Reply to “Doug Adkins: Budget Priorities and Healthcare”

  1. Betsie Huben

    Can you provide examples where this has been brought online successfully, how it gets paid for and how it gets its ongoing operations budget. It sounds appealing but – when I look at our marina, the airport and the city golf course situstions, I am not inspired to think a municipality can pull this sort of thing off under the weight of all its other responsibilities.

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