Florida Medicaid overhaul gets federal OK

Washington -- Florida has received federal approval to restructure its Medicaid program by shifting most of the state's 2.2 million beneficiaries into managed care plans through a defined-contribution system.

Pending final approval by the state Legislature, a pilot program affecting about 210,000 residents is scheduled to launch in July 2006, later followed by statewide rollout.

Gov. Jeb Bush hailed the federal approval, which occurred Oct. 19, as an important step toward making the program sustainable. "By overhauling Medicaid, Florida is creating a system that empowers patients and expands access to best serve our most vulnerable citizens for years to come," he said. A $15-billion program, Florida Medicaid could consume $50 billion -- nearly 60% of the state's budget -- by 2015 if left unchanged.

Under the waiver, the state would offer patients a lump sum that they could use to buy coverage from an approved managed care plan or from an employer. The defined-contribution arrangement should give the state more budget predictability, says the Florida Agency for Health Care Administration.

Recognizing that the dramatic growth in Medicaid spending over the past few years is unsustainable over the long run, Florida's physicians are working with the state, said Francie Plendl, government affairs director for the Florida Medical Assn.

"The FMA is ensuring that we are deeply involved in each step, as physicians are an important and integral part of the Medicaid system. We do not want to see the changes to the system make Medicaid a program that physicians can no longer participate in," she said.

Florida's move represents a significant shift in what it means to be covered by Medicaid, said Alan Weil, executive director of the National Academy for State Health Policy, a nonpartisan public policy organization in Portland, Maine.

While plans still must offer beneficiaries all services required under federal statute, they will have more flexibility than the state has had to limit their quantity and duration, he said.

"It's not just a question of whether people are able to get coverage, but are the sickest patients having their health care needs met?" he asked.