Agenda 06/22/2021 Item #17A (Ordinance - Establishing a Local Provider Participation Fund)06/22/2021
EXECUTIVE SUMMARY
Recommendation to adopt an Ordinance to establish a Local Provider Participation Fund for the
Directed Payment Program to be solely funded by assessments on hospital-owned property or
property used as a hospital.
OBJECTIVE: To establish an Ordinance in support of area hospitals that provide health services to the
low-income citizens of Collier County.
CONSIDERATIONS: On June 8, 2021, Item 16D13 the Board of County Commissioners (Board)
approved the authorization of the advertisement of an Ordinance establishing a Local Provider
Participation Fund for the Directed Payment Program to be solely funded by assessments on hospital -
owned property or property used as a hospital.
As background, the County has provided Intergovernmental Transfers (IGT) to the Agency for Health
Care Administration (AHCA) since 2006. Through IGTs, the County has provided funding to support the
federal matching program for uncompensated care known as the Low-Income Pool Program (LIP). Since
2014, hospitals elected to no longer participate in the LIP program. However, the County continues to
participate in the minor LIP program with Collier Health Services, Inc., the County’s Federally Qualified
Health Center (FQHC). The county now has the opportunity to similarly provide IGTs to support the
hospital Directed Payment Program (DPP), which was recently approved by the Centers for Medicare &
Medicaid Services (CMS). Florida’s Legislature gave the state’s AHCA authority to implement the
program through IGTs earlier this year.
Nationwide, and especially in Florida, hospitals continue to struggle with the shortfall in Medicaid
reimbursement rates. Hospitals in Collier County provide millions of dollars of care to persons who
qualify for Medicaid annually, because, on average, Medicaid only covers sixty percent (60%) of the
costs of the health care services provided by Hospitals to eligible persons. As a direct result of continued
revenue shortfalls, during the FY21 Florida Legislative session, Governor DeSantis, with the f ull support
of the House and Senate, approved the establishment of the DPP. This program is available to hospitals
providing inpatient and outpatient services to Medicaid-managed care enrollees. It is the intent of the DPP
to offset hospitals’ Medicaid shortfalls and improve the quality of care provided to the Florida Medicaid
population. This program has been adopted by two (2) Florida counties to date - Escambia and Brevard.
In April, the County staff was approached by the Collier County hospitals requesting participation in the
DPP. In order to participate, the County must establish a Local Provider Participation Fund (LPPF) via
Ordinance. The proposed Ordinance establishes the parameters of the LPPF program. At the request of
the hospitals, the County annually will impose a non-ad valorem assessment upon real property owned by
the hospitals or on which hospitals operate to help fund the non-federal share of the State’s Medicaid
Program. This assessment will provide additional funding for Medicaid payments to close revenue
shortfalls associated with the program. Leveraging additional federal support through the DPP program
will directly benefit the hospitals and enable them to provide services to Medicaid -eligible persons and
critical health care programs.
The proposed ordinance will enable the County to levy a uniform non-ad valorem special assessment in
compliance with 42 C.F.R. 433.68. The assessment shall be fairly and reasonably apportioned among
each of the Hospital properties within the County limits. Annually, the Board shall, by adoption of a
resolution, set the assessment in amounts that in the aggregate will generate sufficient revenue to fund the
non-federal share of Medicaid payments associated with local services to be funded by the assessmen t.
The assessment shall constitute a lien upon the assessed properties. Revenue generated by the proposed
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assessment shall be held in a separate account called the Local Provider Participation Fund (LPPF) and
will be available to be used only to (1) provide the Florida Agency for Health Care Administration the
non-federal share for Medicaid payments to be made directly or indirectly in support of hospitals serving
Medicaid beneficiaries and (2) reimburse the County for administrative costs associated with t he
implementation of the assessment authorized by this Ordinance, as further specified in the forthcoming
Assessment Resolution.
That assessment rate is calculated after AHCA finalizes its modeling of the amount of non -federal share
(the assessment) needed to fund the Directed Payment Program. It is anticipated that modeling will occur
sometime in late summer/early fall of 2021. As such, a future item will be brought to the Board to
consider a resolution so that collections may timely occur in September.
If at the end of the Fiscal Year, additional amounts remain in the local provider participation fund, the
Board is authorized to make refunds to Assessed Properties in proportion to amounts paid in during the
Fiscal Year.
The proposed documents have been reviewed by the Tax Collector and Property Appraiser and they have
no objection to the adoption. The Tax Collector and Property Appraiser have no responsibilities under the
alternative assessment process that is proposed. The alternative method of collection pursuant to F.S.
197.3631 states this method shall not require the tax collector or property appraiser to perform those
services as provided for in ss. 197.3632 and 197.3635. Pursuant to Section 197.3632 additional authority
is granted to local governments to impose and collect non-ad valorem assessments supplemental to the
home rule powers. In future years, County staff may elect to recommend that the Board update the
ordinance and adopt a future resolution to implement a uniform assessment process t hat involves the
services of the Tax Collector and Property Appraiser. The Tax Collector and Property Appraiser have
been coordinated with and they have no objection to the adoption of a future program using the services
of their offices.
The Ordinance has been advertised and it is requested that the Ordinance be adopted.
FISCAL IMPACT: The Local Provider Participation Fund is a funding mechanism that takes hospital
funds collected through a non-ad valorem assessment and directs those dollars to the Agency for Health
Care Administration (AHCA) to fund the non-federal share of the State’s Medicaid Program, ultimately
resulting in enhanced funding returned to the hospitals through the Directed Payment Program. AHCA is
currently working on the implementation plan for the Directed Payment Program. Once AHCA finalizes
its modeling, the amount of non-federal share (the assessment) needed to fund the Directed Payment
Program will become available. The information currently available suggests the assessment will be
between $10 and $20 million, with the amount transmitted to AHCA being no more than the actual
amount of assessment dollars received by the County less administrative costs. No more than $150,000
will be retained for administrative expenses.
Relative to budget administration, a budget amendment is necessary that establishes a Local Provider
Participation Fund. The budget will include a revenue account for receipt of assessments paid by the
hospitals and expense accounts for the remittance of program funds to AHCA and reimbursement of
County administrative costs associated with implementation of the assessment. Advertising fees are
expected to be $650.
GROWTH MANAGEMENT IMPACT: There is no Growth Management impact.
LEGAL CONSIDERATIONS: The federal government approved of Florida’s proposed hospital
directed payment program in April 2021. The State Legislature included implementing authority in the
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state budget and implementing bill. With the Governor’s signature of the budget, the directed payment
program is now supported by Florida law. The budget has an effective date of July 1, 2021. After that
date, AHCA will begin the process necessary to allow collection of IGTs from participating counties.
As such, this item is approved as to form and legality and requires a majority vote for Board action. - JAB
RECOMMENDATION: To adopt an Ordinance to establish a Local Provider Participation Fund for the
Directed Payment Program to be solely funded by assessments on hospital-owned property or property
used as a hospital.
Prepared By: Kristi Sonntag, Director, Community and Human Services Division
ATTACHMENT(S)
1. Ordinance (PDF)
2. legal ad - agenda ID 16098 (PDF)
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COLLIER COUNTY
Board of County Commissioners
Item Number: 17.A
Doc ID: 16098
Item Summary: Recommendation to adopt an Ordinance to establish a Local Provider
Participation Fund for the Directed Payment Program to be solely funded by assessments on hospital -
owned property or property used as a hospital or property used as a hospital.
Meeting Date: 06/22/2021
Prepared by:
Title: Manager - Federal/State Grants Operation – Community & Human Services
Name: Kristi Sonntag
05/27/2021 6:12 PM
Submitted by:
Title: Manager - Federal/State Grants Operation – Community & Human Services
Name: Kristi Sonntag
05/27/2021 6:12 PM
Approved By:
Review:
Community & Human Services Kristi Sonntag CHS Review Completed 05/27/2021 6:13 PM
Operations & Veteran Services Kimberley Grant Additional Reviewer Completed 06/01/2021 11:19 AM
Public Services Department Todd Henry Public Services Department Completed 06/01/2021 1:05 PM
Community & Human Services Maggie Lopez Additional Reviewer Completed 06/07/2021 11:36 AM
Grants Erica Robinson Level 2 Grants Review Completed 06/01/2021 1:27 PM
Public Services Department Dan Rodriguez PSD Department Head Completed 06/09/2021 11:19 AM
County Attorney's Office Jennifer Belpedio Level 2 Attorney of Record Review Completed 06/11/2021 10:42 AM
Office of Management and Budget Debra Windsor Level 3 OMB Gatekeeper Review Completed 06/11/2021 10:57 AM
County Attorney's Office Jeffrey A. Klatzkow Level 3 County Attorney's Office Review Completed 06/11/2021 1:31 PM
Budget and Management Office Ed Finn Additional Reviewer Completed 06/13/2021 6:59 PM
Grants Erica Robinson Additional Reviewer Completed 06/14/2021 8:21 AM
County Manager's Office Sean Callahan Level 4 County Manager Review Completed 06/14/2021 8:39 AM
Board of County Commissioners Geoffrey Willig Meeting Pending 06/22/2021 9:00 AM
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Packet Pg. 3059 Attachment: Ordinance (16098 : LPPF Ordinance Adoption)
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Packet Pg. 3069 Attachment: legal ad - agenda ID 16098 (16098 : LPPF Ordinance Adoption)