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Senate panel OKs ‘bold’ Medicaid overhaul

With the chief sponsor calling for "bold and transformative" changes, a Senate committee today approved a controversial proposal that would hand over most of the Medicaid program to managed-care plans.

The Senate Health Regulation Committee unanimously approved a bill that calls for shifting hundreds of thousands of women, children and seniors into HMOs and other types of managed-care organizations.

The full House is expected to pass its version of the Medicaid overhaul Thursday, setting up complicated negotiations in the coming weeks to reach agreement on a final compromise.

Senate Health and Human Services Appropriations Chairman Joe Negron, a Stuart Republican who is the chief sponsor, said the bill can improve care for Medicaid beneficiaries who have been "second-class citizens" under the current fragmented system. But lawmakers also want to use managed care to hold down costs in the $20 billion program.

"It's crowding out funding for public education, for public transportation, public safety (and) economic development,'' Negron said.

But debate during the meeting showed the trickiness of changing a program that serves 2.9 million low-income and disabled people.

As an example, some senators worried about allowing managed-care companies to take over transportation services for Medicaid beneficiaries who need help getting to doctors' appointments. Sen. Jack Latvala, R-St. Petersburg, said he worried that would hurt small local transportation businesses.

"I believe they're going to get squeezed out by conglomerates,'' Latvala said.

But the committee, at Negron's urging, rejected an amendment that would have excluded transportation from the managed-care system. Negron said he wants managed care --- and not the state --- to be responsible for making sure services are provided.

"I want to get us out of the check-writing business and get us into the contract-compliance business,'' Negron said.

Similarly, Sen. Mike Fasano, R-New Port Richey, proposed a series of amendments that he said would help local non-profit agencies compete with HMOs in providing long-term care services to seniors. But the amendments died amid opposition from Negron.

On a broader issue, Florida will need to get federal approval --- in what is known as a Medicaid "waiver" --- to make major changes to the program. Latvala raised the possibility that such approval might not happen.

"What happens if we don't get the waiver with this bill?'' he asked. "What's the back-up strategy in the bill if we don't get the waiver?''

Negron said he is optimistic about getting a waiver, but he also reiterated that the state should be willing to drop out of the federal program if necessary. Such a move would allow Florida to design its own program --- but would mean giving up billions of dollars a year in federal money.

"If that (denial of a waiver) were to happen, we set out specifically in the bill that we as a state would run our own Medicaid program,'' Negron said.

The Senate committee meeting came a day after the full House debated its Medicaid proposal.

House members spent nearly two hours Tuesday sparring about details of their plan --- which is spread across two bills --- and voting on 25 proposed amendments. As a sign of the partisan divisions on the issue, all 20 Republican-sponsored amendments passed, and all five Democratic amendments got killed.

House Health and Human Services Chairman Rob Schenck, R-Spring Hill, said the plan would improve care for Medicaid beneficiaries while also helping control the program's spiraling costs.

But Rep. Elaine Schwartz, D-Hollywood, questioned whether increasing the role of for-profit managed-care companies in Medicaid would lead to limiting services for beneficiaries.

"How could it be that someone could make a profit without limiting services, when your (Medicaid) population is not healthy to begin with?'' Schwartz asked.

Rep. John Wood, R-Winter Haven, said HMOs and other managed-care plans will have incentives to provide quality care. At least in part, that is because plans will have to compete to win contracts in eight regions of the state.

"We built a lot of safeguards into the bill to make sure these people receive the proper care they are entitled to,'' said Wood, chairman of the House Health & Human Services Quality Subcommittee.

At one point, Rep. Jim Waldman, D-Coconut Creek, took a dig at Republican Gov. Rick Scott by questioning whether the Solantic urgent-care chain could contract with HMOs and make money from the overhaul. Scott helped found the chain and transferred his interest to his wife in January.

Schenck initially responded that he was not "familiar with what Solantic is.'' But when pressed, he said the bill doesn't put restrictions on HMOs contracting with health providers.

"That's up to the HMO who they want to contract with,'' Schenck said.

House and Senate leaders have made a top priority this year of revamping the Medicaid program. The Senate version of the overhaul will get its first vote Wednesday in the Health Regulation Committee.

The House and Senate bills agree on a big-picture approach of transforming Medicaid into a managed-care system. But in crucial details, the Senate and House bills include major differences.

As an example, the House wants to eventually include people with developmental disabilities --- such as mental retardation and cerebral palsy --- in the statewide managed-care program. The Senate would not do so.

Under the House plan, beneficiaries would gradually be shifted into managed-care plans over five years. Along with people who have developmental disabilities, the plan would include seniors who need long-term care and the broader Medicaid population such as women and children.

In developing the bills, House and Senate leaders have been careful to include managed-care plans that are not HMOs. Most likely, those other plans would be provider-service networks, which hospital systems could use to compete with HMOs.

Many of the proposed amendments Tuesday involved highly technical issues and drew little discussion. But Democrats tried to spur debate with amendments that sought broader changes.

For instance, Rep. Janet Cruz, D-Tampa, proposed breaking the state into 11 regions where managed-care plans would compete, up from the eight included in the bill. Cruz said regions were so large in some rural areas, such as the Panhandle, that beneficiaries could be forced to travel long distances to get care.

"Without access, this plan does not work,'' Cruz said.

But Schenck said increasing the number of regions might make it harder to attract managed-care plans to compete in some areas. That is because the regions need enough Medicaid beneficiaries to make them financially viable for the plans.

Democrats also criticized part of the plan that would partially shield doctors and other providers from expensive medical-malpractice lawsuits when they treat Medicaid patients. That would limit non-economic damages, which are typically awarded for pain and suffering, to $300,000.

"Do you think it's just a little bit unfair that the deserving victim --- the meritorious victim --- is capped?'' asked Rep. Darryl Rouson, D-St. Petersburg.

But Schenck rejected another Democratic suggestion that it was unfair to place limits on suits brought by Medicaid beneficiaries but not on other people who have private health insurance.

"This in no way is discriminatory,'' Schenck said.

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