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Senate Medicaid overhaul heads to floor

With negotiations looming with the House, the Senate Budget Committee approved a massive Medicaid overhaul Thursday that would try to slam the brakes on health-care spending.

The bill includes a controversial proposal that would cap the amount of money the state spends each year on Medicaid and force mid-year cuts if costs go up. The proposal could be a key issue as lawmakers try to reach agreement in the coming weeks on a final Medicaid plan.

Senate Health and Human Services Appropriations Chairman Joe Negron, R-Stuart, has made the cap a priority and says it would offer "budget predictability." In recent years, the state has faced steadily increasing costs as the bad economy has pushed more people into Medicaid.

"We as a legislature will decide, 'This is how much we're going to spend on Medicaid,' '' Negron said before the Senate Budget Committee voted 17-4 to approve the overhaul bill and send it to the full Senate.

But critics of the Senate bill fear the cap could force dramatic cuts in services. Karen Woodall, a lobbyist for the left-leaning Florida Center for Fiscal and Economic Policy, told the committee that such a cap could have forced about $1.6 billion in spending cuts this year.

Under the bill, lawmakers would approve a set amount of money for Medicaid each year. If costs exceed that amount, the bill includes a pecking order of expenses to cut, starting with administrative costs but also going down into services and provider rates.

"Issues like the hard caps distress me,'' said Senate Minority Leader Nan Rich, a Weston Democrat who voted against the overhaul, SB 1972.

The caps are one piece of a sweeping bill that eventually would force most Medicaid beneficiaries into managed-care plans. The full Senate likely will vote on the bill after Easter, while the House has already passed its version.

The Budget Committee approved a series of amendments Thursday, including one that reversed a decision about how to hold HMOs accountable for spending money on patient care.

The amendment would require managed-care plans to spend 90 percent of the money they receive on patient services, a concept known as a "medical-loss ratio.'' HMOs would pay back money to the state if they didn't hit that 90 percent target.

An original version of the bill included that ratio, but a committee last week eliminated it and approved an arrangement that could lead to HMOs sharing Medicaid profits with the state. The House bill includes such a profit-sharing plan.

Michael Garner, president of the Florida Association of Health Plans, said the medical-loss ratio is an issue that the two chambers will have to discuss in reaching agreement on a final bill. Garner's HMO-industry group favors the House's profit-sharing proposal.

Another amendment approved Thursday would allow Medicaid managed-care plans to decline to provide family-planning services. The amendment was geared to "provider-service networks," which are local plans that are expected to compete with HMOs after the Medicaid overhaul.

Negron described the amendment as a "conscience clause" and said he filed it because groups such as Catholic hospitals want to form provider-service networks. But Rich said she was concerned that Medicaid beneficiaries might not have other managed-care choices in some areas, which would leave them without family-planning services.

House and Senate leaders agree they want to make major changes in the $20 billion Medicaid program and shift beneficiaries into managed-care plans. But with the May 6 end of the legislative session nearing, they still have to work out myriad differences.

The Senate's proposed spending cap is one example. But others were apparent during the Budget Committee meeting.

For instance, the Senate would revamp the way transportation services are provided to Medicaid beneficiaries, giving control to managed-care plans. The House, meanwhile, would keep in place a statewide system of transportation contractors.

Another difference is that that Senate bill includes changes that would help shield nursing homes from costly lawsuits, an idea that is not included in the House bill.

Among other things, the bill would place a $250,000 limit on non-economic damages in wrongful-death lawsuits against nursing homes and also make it harder to sue for punitive damages.

Those limits drew opposition from Madison resident Randolph Gray, who told the committee that his father and mother died in nursing homes within an 18-month period in 2008 and 2009. He said his father died because a nursing home didn't follow dietary guidelines, and his mother died after nursing-home staff members didn't respond to her cries for help.

Gray said the Senate bill would take away nursing-home accountability, which is critical.

"When it gets out of balance, people get taken advantage of,'' said Gray, an insurance adjuster.

But Negron said the bill does not take away the rights of nursing-home residents. He said, for instance, the $250,000 limit on non-economic damages would apply to the amount of money children could receive if a parent dies because of nursing-home negligence.

"Whether you get a check for $250,000 or $500,000 or $750,000, the loss to you as a child is the same,'' Negron said.

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