By Jim Saunders
2/18/2010 © Health News Florida
As health groups grow increasingly alarmed about potential budget cuts, the Agency for Health Care Administration has come up with a plan to expand Florida's controversial Medicaid-reform pilot program by up to 19 counties.
In a presentation Wednesday to a Senate committee, AHCA Secretary Tom Arnold said the counties -- which range from rural Wakulla to metro Miami-Dade -- could handle an expansion of the pilot, which requires Medicaid beneficiaries to enroll in managed-care plans.
Such an expansion could affect 375,000 people and save $58.7 million during the upcoming fiscal year. Managed-care supporters say expanding the pilot program would help reduce fraud and hold down spiraling Medicaid costs.
"We believe it does slow the growth of expenditures,'' Arnold said.
But Crestvew Republican Durell Peaden, chairman of the Senate Health and Human Services Appropriations Committee, said $58.7 million in savings would do little to help close a Medicaid budget shortfall that likely will top $1 billion for the 2010-11 year.
"That's nothing,'' Peaden said. "That's a drop in the bucket compared to what we need to save.''
Expanding the Medicaid pilot, which now operates in Broward, Duval, Baker, Clay and Nassau counties, will likely spur one of the biggest debates of the annual legislative session that starts March 2.
Advocates for Medicaid enrollees have long been wary of the program, in part because of concerns that managed-care organizations will save money by squeezing care.
House and Senate committees have been studying the issue, and Gov. Charlie Crist said last week he was "open'' to expanding the program, after opposing such a move for three years.
Senate Ways and Means Chairman J.D. Alexander said lawmakers need to rein in Medicaid costs, which are projected to total $19.18 billion in 2010-11. Caseloads and costs have soared during the economic recession.
"It's a huge issue for our state that we have to come to terms with,'' said Alexander, R-Lake Wales.
The plan that Arnold presented focused on counties that have two or more managed care plans that are capable of taking on additional enrollees. The counties eligible for expansion are: Miami-Dade, Orange, Hillsborough, Pinellas, Brevard, Citrus, Hernando, Jefferson, Lake, Madison, Manatee, Osceola, Pasco, Polk, Seminole and Wakulla.
Gadsden, Liberty and Palm Beach counties qualify by having at least two managed-care plans but the plans could absorb only a portion of Medicaid enrollees.
Managed-care plans that take part in the program could be health-maintenance organizations or managed-care networks headed by hospital systems or minority physician groups.
In contrast to the counties targeted in the presentation, 35 counties --- mostly in rural areas of North and South Florida --- have fewer than two managed-care plans. Another eight counties have at least two, but they lack the capacity to absorb so many new Medicaid enrollees.
Arnold's presentation came amid wide-ranging discussions in the Capitol about how the Legislature will deal with its budget problems in the coming year. Health groups are gearing up for lobbying fights to avoid deep cuts --- an effort that has received extra fuel as legislative committees work on finding places to save money.
State agencies submitted proposals to Peaden's committee suggesting ways to cut 15 percent from their budgets. Similarly, the House Health Care Appropriations Committee has gone through a budget exercise that involved lawmakers ranking programs by priority for funding.
AHCA’s proposal for savings included expanding the Medicaid reform pilot, reducing nursing-home staffing requirements and eliminating a wide range of Optional Medicaid services such as eyeglasses, hearing aids and maternity care for women with modest family incomes (between 150 percent and 185 percent of the federal poverty level).
Anne Swerlick, a Florida Legal Services deputy director who works on health issues, said eliminating services for Medicaid enrollees can lead to higher long-term costs, as people end up needing more-intensive care such as hospitalization.
"There might be a short-term savings, but it's going to hit us in the long run,'' Swerlick said.
Potential cuts offered in the House and Senate also would hammer mental-health and substance-abuse programs. The Florida Council for Community Mental Health said those programs were targeted for as much as $172 million in potential cuts in the House committee's prioritization process.
With major budget decisions likely to be made near the end of the 60-day legislative session, it is too early to know what programs will be cut. The House and Senate have gone through similar exercises in the past --- but pulled back from worst-case reductions.
Nevertheless, Jim DeBeaugrine, director of the state Agency for Persons with Disabilities, made clear Wednesday that he didn't want to have to carry out the cuts he proposed to the Senate committee.
After a lawmaker asked about the effects of one proposed cut dealing with programs that developmentally disabled people attend during the day, DeBeaugrine replied, "In all honesty, it would be very drastic.''
--Capital Bureau Chief Jim Saunders can be reached at 850-228-0963 or by e-mail.