Medicaid Managed Care Rates May Jump

Jun 23, 2015

Medicaid health plans, which lost $543 million in the first half-year of Florida’s Statewide Medicaid Managed Care program, have been hoping for major rate relief Sept. 1, when the second year of the program begins.

The Agency for Health Care Administration has proposed a rate increase averaging 6.4 percent for the coming year, ranging from less than 1 percent in the Pasco-Pinellas Counties region to 14 percent in two north Florida regions that cover rural counties.

On Thursday, plan actuaries will meet with AHCA and its consultants in Tallahassee in hopes of showing they need higher rates to remain actuarially sound – a requirement under state and federal law. 

The companies have AHCA contracts to take care of Medicaid patients in different regions, and have varying market shares.

According to a report by Stifel & Co., the rate increases for plans that have at least 300,000 Medicaid enrollees in Florida for the coming year will be:

(Editor's note: An earlier version listed the wrong percentage increases for  Prestige and Centene).

·         Amerigroup, 3.5 percent

·         Humana, 6.8 percent

·         Prestige Health, 7.5 percent

·         WellCare, 6.7 percent

·         Centene, 6.6 percent 

UnitedHealthCare, with 270,000 enrollees, would receive the largest increase in rates at 8.7 percent under the proposal.

The proposed increases for smaller plans:  Integral Quality Care, 7.7 percent; Molina, 7.5 percent; Preferred Medical, 5.1 percent; Better Health, 4.4 percent; and Aetna, 5.1 percent.

The proposed rate increases are only about half of what the plans said they needed to cover higher-than-expected costs, says the Florida Association of Health Plans.

“The Medicaid plans are losing money,” FAHP President Audrey Brown said. Higher payments are “the only way to ensure the sustainability of the program and to continue to offer these robust plans to the Medicaid population.”

FAHP had said an increase of 12 percent would be about right to cover both medical inflation and an unexpected spike in prescription spending after high-priced drugs were approved to treat hepatitis C.

But AHCA Secretary Liz Dudek said in a May 21 letter that that amount was a “gross overstatement” of what was needed. When lawmakers pointed out the heavy losses shown in state insurance records, AHCA officials said the plans would be all right.

If the state gave the plans the high rate increases they requested, it would wipe out the 5 percent savings that the managed-care program was created to provide, Dudek said in her letter to the plans.  Also there would be no incentive for plans to be efficient and negotiate cost-effective contracts with hospitals if the state simply upped payments upon request, she wrote.

Carol Gentry is a special correspondent with WUSF in Tampa. Health News Florida receives support from the Corporation for Public Broadcasting.