Settlement Reached In Battle Over Children’s Health Care

Apr 6, 2016

After a court fight that lasted more than a decade, the state and groups representing pediatricians and dentists have settled a class-action lawsuit about care provided to children in Florida's Medicaid program.

The settlement, released Tuesday, came about 15 months after a federal judge found that Florida's history of low reimbursement payments to doctors led to a lack of access to care for many poor children. But the agreement also came after the state argued that an overhaul of the Medicaid system had effectively made the case moot.

In the end, the settlement calls for steps aimed at increasing payments to doctors, improving dental care for children and trying to make sure children get enrolled in Medicaid and receive services with minimal disruption. The document said the settlement is the "product of lengthy negotiations and compromise."

"The parties have entered into this agreement in order to settle all claims against defendants (state agencies), to avoid the uncertain outcome of continued litigation and to provide improvements in the delivery of Medicaid to all eligible children,'' the settlement said. "Defendants expressly deny that any of the claims brought by the plaintiffs have any merit and nothing in this agreement is or shall be construed as an admission of liability by the defendants."

The Florida Chapter of the American Academy of Pediatrics, the Florida Academy of Pediatric Dentistry and individual plaintiffs filed the lawsuit in 2005 in federal court in Miami. The defendants were the state Agency for Health Care Administration, the state Department of Children and Families and the state Department of Health, each of which plays a role in providing health care to children.

Physicians and dentists have long argued that low payment rates in the Medicaid program led to limits on access to services for children and other patients. But as the litigation dragged on, state lawmakers in 2011 approved overhauling the Medicaid system to require the vast major of beneficiaries to enroll in managed-care plans --- a departure from the way services were provided and funded in the past.

Many of the terms of the 29-page settlement are intertwined with the managed-care system, which was fully put in place in 2014. As an example, the settlement calls for managed-care plans to increase payments to physicians. To do so, the plans would use money saved through "increased efficiencies" that are a result of the shift to Medicaid managed care.

In part, the settlement calls for managed-care plans to "provide a reasonable opportunity" for board-certified pediatricians and obstetricians during the contract year starting Oct. 1 to be paid at Medicare rates if they meet benchmarks for access and treatment of children. Medicare reimbursement rates are higher than Medicaid payments.

Tallahassee pediatric cardiologist Louis St. Petery, a former executive vice president of the Florida Chapter of the American Academy of Pediatrics, said a lot of the settlement discussion was about increased payment rates.

"And all of that, if you read it, sounds like it's about money for doctors,'' he said. "This is about access for children."

St. Petery also cautioned, however, not to expect quick changes just because payments are supposed to increase.

"I don't see any change in access tomorrow compared to today just because the settlement agreement is in place,'' he said. "The settlement agreement meters this out over one year, two years, three years, depending on which category of physicians and dentists you're talking about. That's a very long time. And it also assumes that AHCA is going to hold the Medicaid HMOs' feet to the fire and make sure that they do find the money in generated savings to actually fund that. Heretofore, AHCA has not held Medicaid HMOs' feet to the fire."

Agency for Health Care Administration Secretary Liz Dudek issued a statement early Tuesday evening that said she was happy to reach a "very positive resolution" to the case.

"Under Governor (Rick) Scott's statewide transition to the (statewide Medicaid managed care) program, we are in a new era of working collaboratively with the members of the Florida Pediatric Society and the Florida Academy of Pediatric Dentistry to achieve our mutual goal: achieving the best possible health outcomes for the children served by Florida Medicaid," Dudek said.

Along with addressing physician payment rates, the settlement will require AHCA to take steps to improve the adequacy of managed-care plans' networks for dental care. Also, it calls for improving outreach efforts so that children will receive dental services.

Among other things, the settlement calls for AHCA and the Department of Children and Families to work to ensure that parents are informed if their children are eligible for Medicaid services and to prevent wrongful terminations from the program.

The settlement also calls for the state to pay $12 million in legal fees and costs for attorneys who have represented the plaintiffs during the past decade, though the payment is subject to review and approval by state Chief Financial Officer Jeff Atwater.

Federal judge Adalberto Jordan has overseen the case and issued the December 2014 ruling that found a history of problems in the way the state provided Medicaid services to children. But Jordan did not rule at the time about what remedies should apply, and the litigation continued.

"After 10 years of litigation, we are pleased that we have been able to reach a comprehensive settlement that will substantially improve health care access and outcomes for the millions of Florida children who depend on Medicaid," said Stuart Singer, the lead counsel for the plaintiffs and head of Boies, Schiller & Flexner's Fort Lauderdale office.