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House unveils Medicaid overhaul

More patient and less confrontational than the Senate, the Florida House has released a proposal to transform Medicaid into a statewide managed-care program during the next five years.

The House proposal, posted on its website without any fanfare, appears to largely mirror a bill that the House passed last year. The Senate did not approve that bill, so lawmakers will try again to agree on a Medicaid overhaul during the legislative session that starts Tuesday.

Both the House and Senate have the same goal: shifting hundreds of thousands of low-income and elderly people into managed-care plans.

But they take vastly different approaches. The House bill eschews the Senate's threats to begin having Florida run the program itself -- and potentially give up billions of dollars in federal money -- if Washington doesn't go along with proposed changes.

Also, the House bill would phase in mandatory managed-care enrollment over a five-year period, with implementation for the first group starting July 1, 2012. The Senate's new managed-care system would start operating in early 2012 and be fully in place in 2013.

Another major difference is that the House would include Medicaid beneficiaries who have developmental disabilities, such as autism and mental retardation. That group is not part of the Senate Medicaid plan, which was released in February.

Both bills would carve the state into regions, where HMOs and other types of plans, such as provider service networks, would compete to win contracts. But the House would split the state into seven regions, while the Senate proposes 19.

The proposed House changes would start taking effect July 1, 2012, for seniors who need long-term care services. Implementation would start Jan. 1, 2013, for a more-general Medicaid population, such as women and children. It would start Jan. 1, 2015, for people with developmental disabilities.

House leaders have said for weeks that they expected to use the bill that the House passed last year as a starting point for this year's Medicaid deliberations.

House Health and Human Services Chairman Rob Schenck, R-Spring Hill, sent the bill to other House members late Friday. He said in a memo that the proposal builds on last year's legislation and "offers a comprehensive approach to reforming Medicaid by serving all populations in an integrated managed care program."

But the proposal includes some changes, including splitting the state into seven regions. Last year's bill used six regions.

Also, it appears to do away with a proposal last year that health plans spend 85 percent of the money they receive on patient care -- a concept known as a "medical loss ratio." Such ratios are highly controversial in the insurance industry, at least in part, because of questions about what expenses should be counted as patient care.

The bill, however, includes what it calls an "achieved savings rebate" that Schenck's memo describes as being "created to incentivize plan management while returning a share of profit to the state.''

That proposal involves a formula that would look at health-plan revenues and income. Plans would be able to keep pre-tax income up to 5 percent of their revenues. But larger amounts of profit would have to be split with the state.

Both the House and Senate proposals would dramatically expand a Medicaid managed-care pilot program that operates in Broward, Duval, Baker, Clay and Nassau counties.

Legislative leaders argue that requiring Medicaid beneficiaries to enroll in managed-care plans will help hold down long-term costs. But critics worry that patient care could suffer as health plans try to squeeze profits out of the system.