Monroe County may owe the state much less for Medicaid back payments that it previously expected, a development that will make crafting next year's budget a little easier. The bill is going from $3.6 million to $1.9 million, about a 47 percent decrease.

The state Agency for Health Care Administration initially billed the county $3.6 million for Medicaid payments dating back to November 2001, but the agency has since recalculated the debt, according to the Florida of League of Cities, which sued the state agency over the billing issue.

The news comes as the county is assembling its budget for the 2012-13 fiscal year, which begins Oct. 1.

"This gives us more confidence going into the budget season," County Administrator Roman Gastesi said.

Statewide, the amount assessed to counties is reduced from $325 million to $172.3 million, according to the League of Cities.

Legislation enacted earlier this year and signed into law by Gov. Rick Scott makes it difficult for county governments to challenge incorrect Medicaid bills, and put the counties on the hook for those costs going back to 2001.

Counties pay their share of Medicaid costs based on the residency of health care recipients. But costs incurred through treatment of out-of-county individuals are often incorrectly billed to the county where the patient was treated. Under the new law, counties cannot dispute patients' residency.

In the past, Monroe County saved millions of dollars by researching patients' addresses.

The County Commission has scheduled its first budget workshop for July 26 in Key West.

tohara@keysnews.com