A Leon County circuit judge has ruled that a legal battle should continue over a legislative decision to cut Medicaid funds from two South Florida hospitals with ownership ties to a nursing home where residents died after Hurricane Irma.
Larkin Community Hospital and Larkin Community Hospital Palm Springs Campus, both in Miami-Dade County filed the lawsuit in June challenging the constitutionality of fine print, known as “proviso” language, that was tucked into this year’s state budget. The fine print would prevent the hospitals from receiving Medicaid money used for training physicians. It bars graduate-medical education money from going to hospitals “owned or operated by a controlling interest” that has had a nursing-home license revoked since Jan. 1, 2017.
The state says the hospitals are under the controlling interest of Jack J. Michel, who also has a controlling interest in The Rehabilitation Center at Hollywood Hills, a nursing home where residents died after Hurricane Irma knocked out its air-conditioning system in September 2017. The hospitals sought an injunction and judgment against the proviso language, while the state argued the lawsuit should be dismissed.
Circuit Judge Angela Dempsey issued a two-page order Wednesday denying the motions from both sides, effectively clearing the way for the lawsuit to continue. In part, the hospitals contend that the budget proviso is unconstitutional because it revamps broader state laws about who is qualified to receive graduate-medical education money, the criteria for the funding and how it is distributed. But Attorney General Ashley Moody’s office has argued that purposes of the graduate-medical education programs include improving quality of care for Medicaid patients and increasing the supply of highly trained physicians.
“A proviso that withholds appropriation from hospitals that have a direct connection, through a common controlling interest, to a nursing home that has been found to have intentionally or negligently harmed a resident can be considered directly and rationally related to improving the quality of care of Medicaid recipients,” the state’s motion to dismiss the case said.