Crist wants to merge health agencies

Feb 25, 2009

By Christine Jordan Sexton
2/25/2009 © Florida Health News

Gov. Charlie Crist is reportedly preparing to recommend a merger of the two largest state health agencies into one, a proposal that would affect thousands of state employees. He also wants to keep the state’s Medicaid “Reform” program unchanged and increase the fees doctors and HMOs get for treating the poor.

It’s unclear whether the popular Republican governor will be able to get state lawmakers to adopt either the merger or Crist's $66.5 billion budget for the fiscal year that begins in July, which relies on the federal stimulus funds to balance. 

Legislators, who begin their 60-day session next week, may not go along with his proposal to merge the Agency for Health Care Administration and the Department of Health. Although no bill had been filed as of Wednesday morning, administration officials confirmed in background briefings that the governor wants to fold AHCA inside the Department of Health over two years.

A merger of the two agencies would reverse decisions made in the 1990s to split up regulation of the health-care industry. The Department of Health was created in 1996 when lawmakers broke up the old Department of Health and Rehabilitative Services. AHCA started out in 1992 as a state health-purchasing agency.

Responsibility for licensing and discipline of health professionals, which had been housed in the Department of Business and Professional Regulation, ultimately ended up at DOH. It has 3,137 funded positions, would actually gain 188 staff members under the governor's budget. It is by law required to have a physician as its secretary. 

AHCA, which would keep the same number of positions as in the current budget, 1,686, administers Medicaid and regulates hospitals and nursing homes. The law doesn't require that its secretary be a physician; in fact, the current Secretary, Holly Benson, is a former legislator.

Crist’s staff is reviewing whether to keep the physician requirement in the merger. When the merger is complete, the staff said, it should  save about $2 million.

Attempts to contact the Florida Medical Association for comment on the proposed merger were unsuccessful. The FMA, which lobbied for the creation of a state health department headed by a physician, has in the past opposed any suggestion of a merger.

State Sen. Durell Peaden, a retired physician who chairs his chamber's health care spending committee, told Florida Health News that merging the two departments was a bureaucratic move that wouldn’t accomplish real savings. He's a Republican, but Weston Democrat Sen. Nan Rich said she doesn’t favor the merger either.

“I think AHCA and the Department of Health have entirely different missions. I think they should remain as separate agencies,” she said. Rich said she doesn’t think the merger would provide greater efficiency.

One high-profile item is missing from Crist’s budget plan: expansion of Medicaid “Reform,” a pilot project that requires most Medicaid beneficiaries to be enrolled in HMOs or similar networks.

The project, which now covers five counties and was supposed to expand statewide, has run into trouble recently. Broward County officials voted Tuesday to seek an exit strategy, and the state’s largest Medicaid HMO contractor, WellCare Health Plans Inc., notified the state it will soon pull out of Duval and Broward, the two most populous participating counties.

Crist spokesman Sterling Ivey said the governor won’t weigh in on the issue of whether the Medicaid Reform project should be expanded until a state-sponsored University of Florida study is complete, a project that could take several more years.

Crist’s proposed budget now goes to the Florida Legislature as it opens the 2009 regular session next week. Lawmakers can refuse to fund the governor’s requests or add proposals he did not include.

In his budget, Crist recommended an increase in fees paid to doctors who treat Medicaid patients: $34.8 million for dermatologists, neurologists and orthopedic surgeons, and $16.1 million for dentists. Low reimbursements for these specialists are often cited as the reason few participate.

Crist also recommended a $91 million boost in the per-person monthly premiums -- the “capitation rates” -- paid to Medicaid HMOs. Michael Garner, president and CEO of the Florida Association of Health Plans, said if approved it would mean a 4 percent increase over current spending. Medicaid capitation rates have been cut 5 percent over the last 18 months to balance the state budget.

Garner said a 4 percent increase would go a long way in tight economic times. “Any money is good money,” he said.

Crist also wants to spend $52 million more on the Florida KidCare program to increase enrollment by 46,000 children. The governor also called for spending $9 million to restore school nurse programs across the state.

He would use money from the federal stimulus package for these initiatives. Florida is to receive about $5.3 billion for its health and human services programs over three years.

The federal dollars come with a caveat: The state must keep Medicaid spending intact at July 2008 levels and not make any further reductions. For Florida that means keeping Medically Needy and Medicaid Aged and Disabled, two programs that serve about 45,000 people combined and cost about $800 million. Funding for the programs expires June 30 and the laws creating them have been removed from the books.

Another potential stumbling block Crist faces is that he must get 60 percent of legislators to agree to using the one-time federal stimulus package for Medicaid programs. A state Constitutional amendment requires the extraordinary vote margin when using one-time money for ongoing programs.

Social services lobbyist Karen Woodall gave the governor high marks for his budget, noting that continuing to make reductions to Medicaid doesn’t make sense and that money spent on health care goes to support jobs.

But she and the governor part ways on his refusal to refusal to raise taxes, even to plug loopholes. Sen. Rich agrees: “(W)hen the stimulus goes away in nine quarters, we don’t have any revenue to take its place.”

-- Contact Christine Jordan Sexton. Free-lance reporter Gary Fineout contributed to this story.