$10B In Healthcare Funds Headed To Florida Hospitals That Treat The Poor, Uninsured

By Christine Sexton, Florida Phoenix

May 1, 2026

Lawmakers won’t return to work on a state budget until they reconvene in a special session beginning May 12.

But the Legislative Budget Commission this week agreed to give the green light to allow billions in healthcare dollars to flow to Florida hospitals.

The joint House-Senate panel on Tuesday approved two budget amendments that, combined, allow the state Agency for Health Care Administration to spend more than $10 billion on Florida hospitals that treat the poor, elderly, and disabled who rely on Medicaid, a healthcare safety net program administered by both the state and federal government.

The commission agreed to allow the state to spend nearly $8 billion for what is known as the Direct Payment Program, or DPP.

AHCA has received near-final approval from the federal Centers for Medicare and Medicaid Services for the money. According to AHCA’s website, DPP funding is provided to hospitals for inpatient and outpatient care. Specifically, DPP dollars help to bridge the funding gap between the amount hospitals are paid for treating managed-care enrollees and the amount it costs to provide the care.

The DPP is funded through a combination of local government funds, which are transferred to the state and used to draw down matching federal dollars.

AHCA Deputy Secretary for Medicaid Brian Meyer told the panel that final approval of the funds, tied to already submitted paperwork, is imminent.

“We are hopeful that final approval will come any day,” Meyer said when commission member Sen. Lori Berman asked about timelines.

He added: “Certainly, the hope is that we can get approval any day now because that’s what we’re hopeful for and we can move forward with issuing these payments.”

That wasn’t the only healthcare funding the commission authorized AHCA to spend this week.

The panel also granted authority to spend $2.17 billion in “Low Income Pool” funds. Commonly referred to as LIP, the money also combines local government funds and matching federal healthcare dollars.

Unlike DPP — which is used to offset shortfalls in Medicaid reimbursements — LIP funds are given to hospitals to help offset charity care they provide to uninsured patients. Medicaid patients aren’t considered uninsured.

The $10 billion in additional spending authority isn’t for the coming fiscal year 2026-27 budget, which will be the center of attention when the Legislature returns to Tallahassee for the 18-day budget session.

Instead, the spending authority is for the FY 25-26 budget, which expires June 30.

House Health Care Budget Committee Chairman Alex Andrade, a Pensacola Republican, asked Meyer about the timelines and why it took so long for the state to receive approval from CMS for the DPP and LIP programs.

“Just looking forward, exactly what is your understanding of what may have created any kind of hold-up at the CMS level,” Andrade asked, referring to the federal money.

Meyer said the delay was due to the Trump administration’s crackdown on supplemental payment programs such as DPP and LIP that rely on local dollars and provider taxes to fund them.

The Trump administration argues supplemental payment programs allow states to tap into additional federal Medicaid dollars but not have to increase their own spending because the required state costs are shifted to local taxpayers and healthcare providers.

CMS estimates supplemental payment programs have generated about $24 billion annually and that the One Big Beautiful Bill Act will save $78 billion over the next 10 years by seeking to lower supplemental payment programs funded through provider taxes.

“Everything we’ve achieved with this administration has just come under longer levels of review,” Meyer said.

“I would just say, this follows a pattern that we’ve seen with CMS in terms of enhanced scrutiny under the state-directed payments, provider taxes. You know, with the One Big Beautiful Bill, that was the focal point. State-directed payments, provider taxes, and there were regulations around that. So, CMS, I believe, is just pursuing their review of these with additional levels of review and scrutiny.”

The Florida Phoenix, a nonprofit news site that’s free of advertising and free to readers, covers state government and politics through a mix of in-depth stories, briefs, and social media updates on the latest events, editorial cartoons, and progressive commentary. The Phoenix is part of States Newsroom, a national 501(c)(3) nonprofit supported by grants and a coalition of donors and readers.