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Keep Eye on Medicaid Plans: Report

A research team that has been monitoring Florida’s “Medicaid Reform” movement for almost a decade is calling for vigilance as the last patients – those who are sickest and most at risk – are transferred into commercial HMOs.

The authors noted with approval that federal health officials have imposed some unprecedented patient-protection requirements on Florida Medicaid as a condition of granting the state’s request for a  waiver of the usual rules.

But they said the protections won’t be of any use if they aren’t enforced. Both federal and state employees are stretched too thin to provide enough oversight, they wrote.

“There are reasons to be concerned as commercial risk-based insurers expand their reach into vulnerable populations in Florida’s Medicaid program,” concluded authors Joan Alker and Jack Hoadley of Georgetown University’s Health Policy Institute.

Their report, released Tuesday, is titled “Medicaid Managed Care in Florida: Federal Waiver Approval and Implementation.” The report was sponsored by the Winter Park Health Foundation and the Jesse Ball duPont Fund.

Florida Medicaid covers a number of low-income populations; already 47 percent of Medicaid patients -- the healthiest ones, mainly children and their parents -- have enrolled in commercial HMOs in large numbers. But HMOs have not attracted other Medicaid groups  who must now enroll in them,  including children and adults who have serious mental and physical illnesses and the frail elderly who qualify for both Medicare and Medicaid.

“Because these populations have higher health care needs, they tend to be more expensive and thus are sometimes targets for cost-cutting,” Alker and Hoadley wrote.  Managed care has the potential to improve coordination of care for such patients, the authors said, but “the need for commercial managed-care plans to control costs and generate profits for shareholders may come into conflict with the cost of providing high-quality care.”

The report did not give examples, but they are familiar to Floridians who follow health news. The most flagrant example became public in 2007, when the FBI and state officers raided WellCare Health Plans’ headquarters in Tampa. They discovered, among other things, that the HMO gave bonuses to employees who managed to persuade the mothers of sick, expensive newborns to switch to another plan.

More recently, Universal Health Care of St. Petersburg – which had Medicaid as well as Medicare patients – collapsed into bankruptcy amid accusations of misappropriation of funds and possible fraud. A criminal investigation is now under way.

The requirements that the Centers for Medicare and Medicaid Services (CMS) imposed on Florida as a condition of receiving an “1115 waiver” included some that are unusual or even unprecedented:

--A “medical-loss ratio” of at least 85 percent. This phrase refers to the percentage of the health-care dollar that the company spends on health-care services for members. “This appears to be the first time that CMS has required a medical-loss ratio as part of a Section 1115 waiver agreement,” the authors of the report said.

--Quality-of-care metrics for the plans that has a target of 75th percentile in the nation among Medicaid plans. The state is required to create consumer health plan report cards each year, “a feature unique to Florida’s waiver,” the report says.

--The plans must commit to participating in the program for five years; if they withdraw from one region because it’s not profitable they have to pull out of all others, and they’ll have to pay penalties as well.

--Another “unique feature” of Florida’s waiver agreement, the report says, is the composition of a Medicaid Medical Care Advisory Committee. Florida’s will have to include at least four Medicaid beneficiaries as members.

The project to move patients out of fee-for-service traditional Medicaid into managed-care plans that would assume financial risk for their care began in 2005 and was called “Medicaid Reform.”  After receiving the initial 1115 waiver from CMS, Florida in 2006  launched a five-year pilot program in Broward and Duval counties, later adding Baker, Clay and Nassau. The pilot waiver was extended in 2011.

In June 2013, CMS granted Florida’s request to expand the pilot to other counties, under the name the Statewide Managed Medical Assistance program. The Agency for Health Care Administration, which is in charge of Medicaid in this state, is currently working on a plan to assess plans’ readiness and solvency.

According to the report, Gov. Rick Scott’s office has said implementation could begin April 1 of 2014. Medicaid patients will be given an opportunity to choose a plan, and will be “auto-enrolled” if they don’t.