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Prestige Wins Medicaid Contracts

Agency for Health Care Administration

With a billion dollars riding on the contested decision, Florida's Agency for Health Care Administration says it will award its Medicaid managed-care contract for Miami-Dade and Monroe counties to Prestige Health Choice.

The final order, signed by AHCA Secretary Liz Dudek on Friday, rejects a recommendation from an administrative law judge who held hearings in the case in November.  The judge, John Van Laningham, wrote that the corporate structure of Prestige Health Choice did not meet the definition for a "provider service network," or PSN.

Care Access, the company that filed the protest that led to the hearings, issued a statement Monday expressing disappointment. The company plans to file an appeal with the First District Court of Appeal in Tallahassee, the statement says.

Each region of the state must offer a PSN as a choice for Medicaid enrollment, in addition to HMOs. So if Prestige was not a true PSN, then the contract would have to be awarded to a competitor. Care Access PSN, which brought the protest that led to the hearing, stood to inherit the contract if Prestige were not eligible.

Van Laningham said Prestige did not have a majority ownership by doctors or other health-care providers, a requirement for designation as a PSN.   Florida True Health, a company formed by two insurers, Florida Blue and AmeriHealth Caritas, owns 40 percent of Prestige. In addition, the judge said, Florida True Health holds an option to purchase the other 60 percent of shares.

Another 13 percent of Prestige is owned by Florida Health Choice Network, which is a consortium of neighborhood health centers. Van Laningham ruled that Florida Health Choice Network is not a Medicaid provider, so therefore Prestige could not qualify as a PSN.  His decision was issued on Jan. 2, and Health News Florida filed this report.

State agencies and boards can overrule the recommendations of hearing officers if they can cite specific errors in the legal reasoning used to arrive at a decision. They cannot override findings of fact.

In its ruling, AHCA said Van Laningham had misconstrued two sections of the law that established the statewide managed-care Medicaid program.

AHCA went ahead and signed a contract with Prestige to enroll patients in Miami-Dade, along with seven  other regions of the state (seelist of plansby region). The three regions in which other PSNs were chosen were Region 2, Panhandle, Better Health Plan; Region 4, Northeast Florida,  First Coast Advantage; and Region 10, Broward County, South Florida Community Care Network.

Frank Reiner, attorney for Care Access, says the law requires AHCA to hold off on issuing the contract until the 1st District Court has ruled in the coming appeal. Health News Florida raised that question with AHCA Monday afternoon, but had not yet heard back by 6 p.m.

Miami-Dade has been a popular target in the managed-care transition because it has the most Medicaid enrollees, and therefore the most potential new customers, for whom the state pays the premiums.  The Miami-Dade contract is expected to pay about $1 billion over five years, a Care Access spokeswoman said.

The Legislature created the law in 2011 that requires virtually all Medicaid beneficiaries -- including those in long-term care -- to enroll in a managed-care plan, either an HMO or a PSN. The long-term-care rollout is in its final phase, and other medical beneficiaries will be shifted between May and August of this year.

The law does away with "fee-for-service" Medicaid payments, in which doctors, hospitals and other providers directly billed the state. Amid the gush of claims, the state found it difficult to prevent fraud and abuse. By privatizing the program -- turning management of treatment and payment over to managed-care plans -- Medicaid becomes a regulator, rather than a direct payer.

While HMOs and PSNs may seem similar from the point of view of the patient, an HMO is a commercial operation that is dually licensed by AHCA and the Office of Insurance Regulation. A PSN is a health-care network owned and run by the health-care professionals who treat the patients.

More information on the Statewide Medicaid Managed Medical Assistance Program is available here.

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.