Shielding Medicaid providers from lawsuits for negligent acts could cost Florida’s taxpayers an estimated $69 million per year in payments for private provider’s mistakes, according to a new report.
Florida CFO Alex Sink sought the report after the Florida Legislature last session weighed whether to extend sovereign immunity to medical providers as a way to encourage them to take more Medicaid patients.
The estimate assuems that the state would be responsible for indemnity payments of as much $200,000 per claimant and $300,000 for multiple claimants under the revised Tort Claims Act limits effective Oct. 1, 2011. The estimated fiscal impact is based upon the state administering, investigating and defending an estimated 551 medical professional liability claims per year costing an average of $125,000 each.
The report notes that the number of medical professional liability claims has been declining, but the average cost per claim has been increasing. It also notes that Medicaid enrollment is expected to increase under the new federal healthcare reform law, and consequently the fiscal impact upon the state of the proposed immunity legislation may increase in the future.
Sink last week released the analysis with a recommendation that lawmakers consider other options rather than granting immunity to providers because it would shift costs to taxpayers.
Outgoing CFO Sink sent the report to Senate and House Leaders.
“The results of the analysis are startling,” CFO Sink wrote. “Most importantly, the report estimated that depending on how the bill is drafted, extending sovereign immunity to Medicaid providers could cost the taxpayers of Florida approximately $69 million per year. These are costs not currently borne by our state, and would amount to Floridians paying for the mistakes of private health care providers.”
In addition to estimating the costs the taxpayers could pay for providers’ mistakes, the report also raised concerns about the constitutionality of extending sovereign immunity to Medicaid providers.
“I agree that our state’s Medicaid program needs to be reformed. However, I do not believe that extending sovereign immunity will convince many doctors to increase the number of Medicaid patients they treat, yet the change could be costly for Floridians,” CFO Sink said.
The analysis was completed by an actuary from the office of the Insurance Consumer Advocate along with members of the legal staff from the Department of Financial Services.
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