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FL ignores flaws of Medicaid pilot, rewards in federal law, reports say

Florida officials have been exaggerating the costs of the federal health law and downplaying risks in the state's Medicaid managed-care pilot, according to studies by Georgetown University’s Health Policy Institute.

The reports, released this morning by the Jessie Ball duPont Fund, come as Florida’s Attorney General leads a court fight to avoid implementing the Affordable Care Act and as lawmakers prepare to vote on a statewide expansion of the Medicaid pilot.

"In such a politicized environment, it's hard to have fact-based discussions about how to move forward together. We hope these studies will help us do that" said Joan Alker, a co-author of the Medicaid pilot study.

The state estimated last year that it would cost $6 billion over six years to implement the federal health law – principally the result of expansion of the Medicaid program -- because officials did not take into account offsetting savings.

But more realistic figures put the price tag for implementing the law no higher than $1 billion, said Jack Hoadley, co-author of the federal reform study. It is even possible that the health law could save money for the state, up to $3 billion, Hoadley said.

Why are the numbers so different?

An Agency for Health Care Administration estimate last year assumed that 100 percent of potential beneficiaries would sign up for the expanded Medicaid program immediately. AHCA also assumed the average cost-per-person would stay the same.

Hoadley said that even the most ambitious Medicaid programs have less than 75 percent enrollment and that a concerted effort to increase that percentage would take years.

"We hope everyone takes advantage of the program," he said. "But based on previous experience, that's just not very realistic."

Also, the cost-per-person would likely decrease because the newly insured will be healthier than those currently enrolled, since the only adults who now qualify for Medicaid in Florida are pregnant, severely disabled or frail enough to be in a nursing home.

"The most expensive patients are more likely to already be on Medicaid," Hoadley said.

Meanwhile, the Legislature has been overstating the benefits of the five-county Medicaid managed-care pilot that began under former Gov. Jeb Bush in 2006. Both the House and Senate are preparing to expand that pilot statewide, to nearly all Medicaid recipients.

The program shifts Medicaid patients who are not already enrolled in managed care into either HMOs or an alternative called Provider Service Networks (PSNs), headed by hospital or physician groups.

The purpose of the pilot program was to improve efficiency and reduce costs in Medicaid, which will cost about $20 billion this year. Yet, the pilot program has shown little success on either front, Alker said.

If the program saves money, which is unclear, it could be the result of increased efficiency or withholding of needed care, she added. No new information on cost-savings has come out since a study she conducted in 2008, she said.

"On the critical question about whether the pilot program saved money, we were surprised to come back after two years and find there's no new information on that," said Alker, who co-authored another study on the pilot in 2008.

Also, access to treatment has been frequently disrupted because of HMO turnover in the pilot counties, Alker noted.

This is a particular problem for disabled patients or patients with chronic conditions who might have to switch doctors or medications under new plans and might have a delay in access to care while they choose another HMO and re-enroll.

"Continuity of care for these groups is very important and this is an issue of serious concern," Alker said.

Many of the disabled patients switched to PSNs after struggling with HMOs, the report said.

(Disclosure: The Jessie Ball duPont Fund is an underwriter of Health News Florida.)

--Reporter Brittany Davis, who is based in South Florida, can be reached at 954-495-6766 or