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Old people first, new Medicaid plan says

Until now, Florida’s plans to transfer Medicaid patients into managed care have focused on children and families, not the sick and frail elderly who need constant care. The assumption was that HMOs’ complicated rules would trip up weak, confused elders.

But that thinking has changed. In the Medicaid overhaul that just passed Florida’s Legislature and awaits an almost-certain okay from Gov. Rick Scott, the elderly and disabled would be the first group required to enroll in managed care.

If federal health officials approve the plan in the coming year, on July 2012 the state will officially begin lining up HMOs and provider-service networks to take on the population beginning in October 2013, according to a state time line.

Other Medicaid patients – mostly healthy children and pregnant women -- won’t have to enter an MCO until 2014, although they can enroll sooner if they want.

Medicaid experts say it’s unusual to make frail elders go first. Consultant Brady Alexander of Tallahassee said he’ll have to read the bills to be certain, but said he’d bet it’s because the state desperately needs to curtail spending.

And old people are where the money goes in Medicaid. In Florida, where 30 percent of Medicaid patients are elderly or disabled, they accounted for almost 70 percent of spending in 2007, according to the web site State Health Facts.

A spokeswoman for House Speaker Dean Cannon offered two reasons for giving the elderly priority. First, said Katherine Betta, the potential for improved care in that population is great, by helping them stay independent and out of nursing homes as long as possible.

A state team will determine each patient’s level of need. Level 1 Medicaid long-term-care patients must be in a nursing home. Level 2’s have significant physical or mental impairment, but can still live in the community. Level 3’s will be mildly impaired, physically or mentally.

The monthly premiums that the plans receive for the Level 2’s would be greater than for the Level 3’s. For the Level 1s – the nursing home patients -- the state will require plans to pass on the full payment without taking part of it off the top.

For the first year only, all nursing home patients will be protected from discharge, whether or not their level of need changes. However, plans will receive financial incentives from the Agency for Health Care Administration to shift at least 2 percent of nursing home patients to community care by the second year. After that, the incentive is tied to a shift of 3 percent of patients or more.

The incentives will continue until no more than 35 percent of plan recipients are in institutional settings.

Health care consultant Paul Gionfriddo says there are a couple of dangers with this arrangement. A nursing home patient who really needs to stay could be discharged to home care against her will, or that of her family.

Also, Gionfriddo says, a decision on when an Alzheimer’s patients need institutionalization will no longer be up to the family and the patient’s doctor. It “will be up to a managed care company with a motive,” he said.

Lawmakers who supported the addition of long-term-care to the Medicaid managed care system noted that there are built-in protections, including quality measures and independent audits.

Michael Garner, president of the Florida Association of Health Plans, said the state had to choose one population or the other to go first because enrolling nearly 2 million patients all at once would have been a crushing workload for the plans, for AHCA and the Department of Children and Families, which handles Medicaid enrollment and helps patients choose a plan.

It made sense to tackle long-term-care because it has the greatest potential for cost-saving, Garner said. His group found studies that showed potentially billions of dollars could be saved..

“The quicker they bring that population in, the quicker the savings,” he said.

A study for the Florida House by the Pacific Health Policy Group last year reported that a managed long-term-care program in Texas was saving $94 per member per month by its second year. Savings for the two years, the report said, were $123 million.

Assuming that Florida is successful in obtaining a federal waiver of the Medicaid rules to allow the managed care requirement, only a small percentage of patients will be exempt. Most are adults who have developmental disabilities, such as severe autism or mental retardation.

Carol Gentry, founder and special correspondent of Health News Florida, has four decades of experience covering health finance and policy, with an emphasis on consumer education and protection.