A federal court judge is ordering the Obama administration to file a response to Gov. Rick Scott's request for mediation by noon on Tuesday.
The Republican governor is suing the federal government for allegedly withholding hospital funds because Florida is not expanding Medicaid. The Obama administration has tentatively said it would extend the so-called low-income pool funds for two more years, but at half the amount next year.
The state has known for well over a year that the funds were slated to expire June 30, but the state waited until the last minute to submit a proposal.
Scott is blaming the federal government for not giving an answer in time, making it impossible for lawmakers to finalize a state budget during the regular legislative session.
On Monday, Scott's administration asked a judge for court-ordered mediation to resolve negotiations with the U.S. Department of Health and Human Services.