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Medicaid waiver coming soon, with patient-protection rules

This week, federal health officials are expected to give Florida an early Christmas present: an extension on a five-county Medicaid Pilot that requires patients to be enrolled in managed care.

But when state officials unwrap the gift, they're likely to find a bundle of strings attached. Most of those strings are intended to keep HMOs from shortchanging patients to hike their profits. Some will likely require hospitals to improve quality of care.

Receipt of the waiver extension on the Medicaid Pilot will be a major relief for state lawmakers and the Agency for Health Care Administration, which in Florida governs the joint state-federal program for coverage of low-income patients. AHCA has been negotiating terms of the waiver for more than a year.

But the conditions attached to the waiver also represent some big wins for consumer and medical groups that have protested the program, including Florida CHAIN. Its policy director, Greg Mellowe, obtained a draft copy of the waiver last week and shared a copy with members and Health News Florida.

Among the hard-fought wins he listed:

--At least 85 percent of taxpayer-funded Medicaid payments must go to direct patient care or quality improvements. The Florida Legislature has resisted imposing this requirement on all but a small part of Medicaid HMO funding.

--The benefits that plans offer Medicaid enrollees must meet the needs of at least 98.5 percent of them. One of the arguments in favor of the Pilot had been that it allowed benefit changes that would better fit the needs of enrollees, but consumer groups argued it needed to be clarified and enforced.

--The state must use contract guarantees and other means to assure that plans can't just pull out of a county, leaving members stranded. Such pull-outs from Pilot counties in the past have led to chaos and made it difficult for patients to find access to care, according to doctors and consumer advocates.

--The state can't impose co-pays or premiums for Medicaid enrollees in the Pilot that aren't allowed in traditional Medicaid. As Health News Floridareported last week, a study from Georgetown University concluded that the $10-a-month premiums the state planned to impose would push an estimated 800,000 enrollees out of Medicaid, mostly children.

"In other words, the state cannot use the waiver to evade the basic protections of Medicaid," Mellowe wrote in his noteto CHAIN supporters this week.

While celebrating the victories, Mellowe said, "none of these are so significant as to make Florida's version of Medicaid managed care experimentation palatable."

Florida has two waiver requests pending at CMS, which is granting the one for a three-year extension of the Pilot before taking up the other. The second waiver would take the managed-care requirement statewide, under a plan that passed the Legislature this year and was signed into law by Gov. Rick Scott.

A majority of Medicaid enrollees -- mainly children and their mothers -- are already voluntarily enrolled in managed-care plans statewide, data show. But if CMS approves the waivers, the state can make it mandatory, even for the most fragile patients: elderly people in nursing homes and adults who have mental illness. The Legislature exempted only those with developmental disabilities such as Down Syndrome and autism.

Aside from consumer and doctors' resistance, a major reason the waiver extension has been held up for more than a year is hospitals' angst over CMS' new rules on spending for Medicaid funds that go into what in Florida is called the "Low Income Pool" (LIP).

On Tuesday in Tallahassee, as the Florida Currentreports, hospital representatives on the LIP Council -- which advises the Legislature on Medicaid budget matters -- learned they will most likely get the $1 billion in federal funding they want but won't get to decide how to spend all of it.

CMS wants to use the power of the purse to improve quality of care for Medicaid patients, and is making release of the funds contingent on that.

As Kaiser Health News reports, CMS' intention of hanging tough on quality-improvement became clear last month when it included the condition in California's waiver and again this week, with the one granted to Texas. Like Florida, both states are moving most Medicaid patients into managed care.

--Health News Florida is an independent online publication dedicated to public-service journalism. Letters to the Editor are welcome; contact editor Carol Gentry at 727-410-3266 or by e-mail.

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.