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Sen. cuts Medicaid, crimps ‘Reform’

By Christine Jordan Sexton
3/27/2009 © Florida Health News

A proposal unveiled by the Senate spending committee on Thursday would cripple -- maybe kill -- the second phase of the controversial “Medicaid Reform” pilot. The Senate budget also would cut Medicaid payments 3 percent to hospitals, nursing homes and HMOs.

However, it would restore funding to the state's Medically Needy program, which helps working families struggling to pay large medical bills. Lawmakers have to revive that program to qualify for federal stimulus money. 

Sen. Durell Peaden, who sponsored Medicaid Reform four years ago, now appears to be engineering its demise. “It might be time to reform the Reform,” he says.

Under the proposal from his Senate Health and Human Services Appropriations Committee, Provider Service Networks -- hospital-and-doctor groups that enroll Medicaid patients in the five counties of the Reform pilot -- would get a two-year reprieve from being put on HMO-style financial risk payment plans. PSN’s would continue to be paid in the traditional way, called fee-for-service.
This extends a three-year delay the PSN’s received when Reform went into effect. The federal waiver authorizing the project would expire before the two-year reprieve ended.

So is this the death knell of the controversial pilot? “Read the tea leaves,” Peaden said.

HMOs see further delay in switching PSNs to strict budgets as patently unfair. It just “perpetuates an unlevel playing field,” said Michael Garner, president and CEO of Florida Association of Health Plans.
PSNs have had enough time to adjust to the Medicaid Reform experience, Garner said. “The three years are up.”

The initiative, called “Reform” since its creation in the administration of former Gov. Jeb Bush, requires most Medicaid patients living in Broward, Duval and three rural counties in Northeast Florida to enroll in network-style managed care, either an HMO or a PSN operated by a hospital or group of doctors.

If the capitation requirement goes into effect as current law requires, said hospital lobbyist Jan Gorrie, the PSN operated by Shands Jacksonville would lose about $11 million next year. That kind of reduction, she said, would force a cut in the number of residency slots. 

“With our growing and aging population and so many physicians nearing retirement, now is not the time to jeopardize our physician training programs,” said Gorrie, who represents the Council of Florida Medical School Deans and the Safety Net Hospital Alliance of Florida, among others. The Senate budget is “great news for graduate medical education.” 

PSNs in Broward don’t have graduate medical education programs, but Gorrie said the delay allows the PSNs there more time to gain expertise in running what amounts to a competitive HMO-style business.
The House is not expected to release full details of its budget proposals until next week, but Gorrie said she hoped lawmakers there would follow the Senate’s lead.

Peaden, a retired doctor and Republican from Crestview, supported former Gov. Jeb Bush in his effort to change Medicaid from an unlimited entitlement for certain groups into something that had limits, like commercial insurance products.

Holly Benson, current secretary of the Agency for Health Care Administration, was then a Republican representative from Pensacola. She sponsored Bush’s plan in the House and worked closely with Peaden to get the measure passed. 

It has been controversial since it was launched. A survey of patients participating in the project by University of Florida released last week showed a dip in satisfaction rates with their health care.
Specifically, the percentage of enrollees giving their health care top scores fell by about 7 percentage points in both Broward and Duval counties between 2006 and 2008.

Now Peaden calls the Medicaid Reform concept a “quick fix” and says it falls short in providing quality care to Florida’s neediest citizens. 

“I don’t mean to be critical of my legislation,” Peaden said, “but I’ll admit my sins sometimes.” 

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