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HMOs request state muscle

Clarification:  Florida collects encounter data on Medicaid patients from HMOs across the state. An earlier version of the article below implied that the state collects such data only  in certain counties.

By Christine Jordan Sexton

2/4/2010 © Health News Florida 

The Legislature should reduce Medicaid pay to hospitals and doctor groups by 10 percent if they refuse to sign managed-care contracts, the HMO industry says. Medicaid HMOs currently operate in only about half of Florida’s counties, in part because of contract disputes.

The Florida Association of Health Plans has a two-year plan to expand the number of Medicaid patients enrolled in managed care, but says it needs help in getting hospitals and physician groups to participate.  The push comes as the Legislature seeks ways to trim Medicaid spending, which now accounts for 26 percent of the state budget and is forecast to rise to 31 percent in four years.

Because the state pays Medicaid HMOs on average 92 percent as much as a traditional Medicaid provider, the impasse hurts taxpayers, said William McHugh, chairman of the health plan group. The health-plan group estimates that the state saves $22 million for every 100,000 recipients moved into HMOs.

“This deprives the state of the ability to obtain the cost savings brought by managed care through better coordination,” McHugh said in a letter to lawmakers. He also said it would help if they loosened the minimum requirements for a provider network and expanded the maximum distance between patients and their doctors.

The Safety Net Hospital Alliance of Florida criticized the plan, saying that it “simply takes money out of our communities and puts it into the pockets of Wall Street.”

“Placing all of the state’s eggs in one basket is risky business,” said Tony Carvalho, president. ”What’s unique about our safety net providers is that they take care of people when they have coverage and when they don’t. The HMO only offers managed care when you are a card-carrying enrollee.’’

The House Select Policy Council on Strategic and Economic Planning had asked the Florida Association of Health Plans to come up with a strategy to cover more Medicaid recipients after some Medicaid HMOs stopped operating in parts of the state.

In the last year, WellCare Health Plans moved both its Medicaid HMOs out of Jacksonville; Amerigroup, United and Vista left Broward County; Fort Myers lost AmeriGroup; Pensacola lost Healthease, and Orlando lost United. 

Advocates for Medicaid recipients say the state shouldn’t make a decision about moving patients into HMOs based solely on financial concerns.

“HMOs are paid less, but that’s not what the Medicaid program is about,” said Karen Woodall. “It’s about making sure adequate services are provided in a cost-effective way.”

She said that before the state requires Medicaid recipients to join HMOs, it should examine the quality of care they receive. 

(Editor's note: An earlier version of this article carried three sentences that were unclear; they have been removed. See Clarification above.) 

Michael Garner, president and CEO of the Florida Association of Health Plans, said they do a good job of coordinating care for patients. If they didn’t, he said, there would be more complaints.

A March 2009 University of Florida survey of Medicaid Reform enrollees—who are required to be enrolled in a managed-care plan — found they were generally satisfied with their health care.

“We are a medical home,” Garner said. “We give you a primary care physician who coordinates you through a network.”

If lawmakers decide to follow the group’s suggested two-year plan, it would mean eliminating the MediPass program, an option for Medicaid beneficiaries who live outside the five Medicaid Reform counties. MediPass relies on primary care doctors to manage treatment for their patients and pays them $2 a month for doing so in addition to paying them for services. Nearly 550,000 Florida Medicaid recipients are enrolled in MediPass.

The Legislature is considering whether to do away with MediPass. Gov. Charlie Crist's budget eliminates funding for the $2 payment.

--Christine Jordan Sexton is co-founder of