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House wants Medicaid do-over

By Jim Saunders 
4/6/2010 © Health News Florida

Seeking dramatic changes in Florida's Medicaid program, House leaders late Monday released a proposal that would require almost all beneficiaries statewide to enroll in managed-care plans --- including seniors who need long-term care. 

The proposal would take years to carry out, but Medicaid managed care would become mandatory in 2011 in Miami-Dade County. The state's most-populous county would join five other counties in a controversial pilot program formerly known as 'Medicaid Reform.'

If approved, the proposal would save little money for the state during the next two years. But House Health Care Appropriations Chairwoman Denise Grimsley, R-Lake Placid, said moving to a fully managed-care system would provide "long-term budget predictability'' in the Medicaid program, which is expected to cost more than $19 billion in the upcoming fiscal year.

The House takes a different approach from the Senate, which passed a bill last week that would expand the pilot program to 19 additional counties. The House proposal would carve up the state into six regions, where limited numbers of health-maintenance organizations (HMOs), provider-service networks (PSNs) and other types of managed-care plans would be chosen to sign up Medicaid beneficiaries.

Ultimately, the House proposal would do away with the fee-for-service system, which pays doctors by the visit or treatment. Fee-for-service has been the traditional payment method since Medicaid, the joint state-federal program for certain groups of low-income people, began in the 1960s.

"The Florida Medicaid program is established as a statewide, integrated managed-care program for all covered services, including long-term care services,'' said one of two draft bills released Monday night by the House Select Policy Council on Strategic & Economic Planning.

Members of the House council, which has spent weeks studying the Medicaid system, are scheduled to discuss the proposal during a workshop tonight. To overhaul Medicaid, the House and Senate would have to agree on a plan --- which likely will make it one of the biggest issues during the final weeks of this year's legislative session.

The House proposal does not include a controversial Senate idea that would seek to cap the amount the state spends on Medicaid and give private-insurance vouchers to Medicaid beneficiaries. That idea is separate from the main Senate proposal to expand the mandatory managed-care pilot to 19 additional counties. 

Republican legislative leaders have repeatedly indicated they want to move away from the fee-for-service system. With Medicaid paying a lot less per service than other payers, a drawback of the fee-for-service system is that it creates a temptation for providers to do more treatments to make up the difference. Critics of the fee-for-service system say it is difficult to police for fraud.

Managed care pays a flat fee per month, no matter how many services are provided. Critics say that creates an incentive to deny or limit needed services, which is a major reason that vulnerable populations have been exempt from managed-care experiments in Florida and other states.

The House proposal would extend mandatory managed care into services for populations such as low-income seniors and people with developmental disabilities. In long-term care, the goal for managed-care organizations would be taking care of people in their communities and keeping them out of costly nursing homes.

A health-advocacy group, Florida CHAIN, sees danger in the plan. Policy Director Greg Mellowe says managed-care plans have not proven that they have either the capacity or the commitment to ensure "continuity of care" for extremely vulnerable patients in Medicaid, such as those with mental illnesses and the physically frail.
 
"The Medicaid safety net is only as strong as the thread used to weave it," he said in an e-mail, "and it`s not at all clear based on their track record that a net woven from managed care plans alone can hold.''

Grimsley, who has been an architect of the proposal, said moving Miami-Dade County into the pilot program would save about $40 million during the 2011-12 fiscal year. But the other parts of mandatory managed care would kick in later, with it applying to long-term care in 2012, the broader Medicaid populations in 2013 and developmental disabilities in 2015.

The proposal would group together urban and rural counties in six geographic regions. That would give HMOs an incentive to serve sparsely populated areas that they might otherwise ignore. Also, Grimsley said it would help with the creation of provider-service networks, which hospitals want to use to compete with HMOs.

Two of the geographic areas in North Florida are huge. One stretches from Pensacola to Madison County, which is east of Tallahassee. Another stretches from Nassau County in the northeast corner of the state to Citrus County on the Gulf Coast.

Another region would link people in the Tampa Bay area south to Lee County; another would focus on the Orlando metropolitan area and nearby areas of Central Florida; another would include Broward, Palm Beach and rural counties in South Florida; and another would include Miami-Dade, Collier and Monroe counties.

The state Agency for Health Care Administration would use a contracting process to choose varying numbers of managed-care plans and provider-service networks that would operate in each area.

The proposal includes a list of minimum benefits that managed-care organizations would be required to provide and also would seek to make sure they spend at least 85 percent of the money they receive on patient care. Also, the proposal includes financial penalties for managed-care organizations that try to pull out of regions before the end of their contracts with the state.

Rep. Elaine Schwartz, a Hollywood Democrat, said such departures have been a problem for the Medicaid pilot in Broward County, disrupting the care provided to Medicaid beneficiaries. She questioned the House proposal to massively expand managed care.

"This is not only flawed, but it's ill-conceived,'' Schwartz said. "And no one benefits from it.''

--Capital Bureau Chief Jim Saunders can be reached at 850-228-0963 or by e-mail at jim.saunders@healthnewsflorida.org.