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State Trims Medicaid HMO Payments

Leon County Judge John Cooper on June 30, 2022, in a screen grab from The Florida Channel.
The Florida Channel
Leon County Judge John Cooper on June 30, 2022, in a screen grab from The Florida Channel.

Florida has reduced by 3.7 percent the rates it pays HMOs and provider-sponsored networks in the biggest part of the Medicaid managed-care system but has given a 2.4 percent hike to plans that offer managed long-term care.
The net result: The state is projected to spend $16 billion-plus on premiums to Medicaid HMOs to care for the poor, elderly and disabled between October 2017 and October 2018. That's about a $300 million premium reduction from what they were paid last year, according to Milliman, an accounting firm that helps state Medicaid officials establish actuarially sound HMO rates.

Agency for Health Care Administration spokeswoman Shelisha Coleman said the new rates went into effect Oct. 1.

Actuaries for Milliman met with legislative and gubernatorial budget staff in August to discuss the rates and said at the time that the reduction in what is known as the “managed medical assistance program” was attributable to lower-than-expected increases in pharmaceutical costs and nearly $500 million in recurring Medicaid reductions made to hospitals last legislative session.

The hospital cuts accounted for 94 percent of the reduction in rates.

Meanwhile, the Legislature's decision to add nearly 14,300 people to the Medicaid managed long-term care program in the coming months helped lower a potential rate increase from 3.3 percent to 2.4 percent.

According to the actuaries, 14,281 people who have been enrolled in the Project AIDS Care, Traumatic Brain and Spinal Cord Injury and Adult Cystic Fibrosis waiver programs are, on average, less expensive to care for than people currently in the long-term care program, which, in part, was why the potential rate was lowered. However, the increased population means that the state will increase the premium it pays to the long-term care plans by an estimated $147 million.

The Legislature in 2011 passed a law that requires most people covered by Medicaid, from the cradle to the grave, to enroll in managed-care plans.