The Florida Legislature convenes today facing a $3 billion budget shortfall, and the state’s Medicaid program is a prime target for budget cutters. 

The economic downturn has hit the state especially hard, pushing unemployment to almost 12 percent.  That has caused Medicaid roles to swell to 2.7 million, or 15 percent of the state’s population.

Increases in Medicaid enrollment and rising healthcare costs have pushed Florida Medicaid spending to $16 billion, one-fourth of the total state budget.  But even as the size of the program has grown, the state has come under fire for providing inadequate care.

Low reimbursement to providers has made many reluctant to treat Medicaid enrollees.  Those low payments have resulted in a class-action lawsuit against the state.

Compounding the task of finding enough money to fund Medicaid is a looming reduction of federal stimulus funds.  Florida officials are hoping to extend the extra federal funding through June 2011.

Potential targets for cuts are optional services such as prescription drugs, mental health services and dialysis.  Lawmakers will also be looking at expanding managed care pilot programs to the rest of the state, which would require federal approval. 

While cuts to hospitals have not been specifically mentioned, an expansion of managed care coverage could impact hospitals’ total Medicaid payments.  Additionally, failure in maintaining a larger federal match rate could lead lawmakers to look for other cuts.