Florida doctors challenge low Medicaid pay

Florida health officials have violated federal law by not ensuring that the state's 1.4 million children on Medicaid have adequate access to primary and preventive care, according to a lawsuit filed against the state.

Physicians, dentists and patients made that argument in December to a Miami federal court as trial began in the class action. They charge that state health officials set physician payments at such low levels that not enough pediatricians and specialists are available to provide services. The plaintiffs allege the insufficient rates violate the federal Medicaid Act's equal access requirements by depriving low-income children of their right to prompt care, including early screening, diagnosis and treatment services.

In addition to the financial issues, the lawsuit points to administrative barriers that have disrupted children's care. Those include failing to notify recipients of available services, improperly terminating their eligibility or needlessly reassigning them to various HMOs.

As a result, more than 40% of Florida children on Medicaid are not receiving the medical care they need, states the lawsuit, filed in the U.S. District Court for the Southern District of Florida.

"Kids on Medicaid don't have the same access to medical and dental care as do kids covered under private insurance, and that's basically what federal Medicaid law requires. So Florida is not living up to its obligation," said Tallahassee, Fla., pediatric cardiologist Louis St. Petery, MD. He is executive vice president of the Florida Pediatric Society, the state chapter of the American Academy of Pediatrics. The society, along with the Florida Academy of Pediatric Dentistry and several families with children on Medicaid, sued the state in 2005.

Florida pays some of the lowest Medicaid rates in the nation, Dr. St. Petery said, amounting to only 56% of what Medicare pays.

According to the lawsuit, "the criteria for sufficiency of payments necessary to assure equal access has been interpreted by courts to mean that reimbursement rates are at least 90% of [Medicare rates], that they enlist at least two-thirds of each specialty's practitioners in full participation in Medicaid, and that they actually achieve delivery of the required care and services. Currently, Florida's Medicaid reimbursement rates are far below this standard."

Dr. St. Petery said the plaintiffs are not seeking damages. Rather, "we just want to see these problems fixed." They are asking the court to order a raise in Medicaid payment rates at least to Medicare levels and compel better state oversight of participating managed care organizations.

The Agency for Health Care Administration, the main state agency responsible for administering the Medicaid program, said it has met federal requirements but declined to comment further.

The Dept. of Children and Families, also a named defendant, said the beneficiary plaintiffs in the case "each received quality and timely medical, dental and specialist care within the parameters defined by Medicaid." The department "will continue to educate and reach out to its clients who benefit from the Medicaid program," spokesman Joe Follick said.

The trial, which began Dec. 7, is expected to continue at least through January 2010.

Prompting change

The Florida case is not the first time physicians and patients have taken to the courts over such issues. Rulings have fallen on both sides.

In 2007, the 10th U.S. Circuit Court of Appeals overturned a trial court ruling that found Oklahoma's insufficient Medicaid payment rates hurt children's access to care. Appellate judges in OKAAP v. Fogarty said the state's only obligation was to pay for Medicaid services, not directly provide for them.

In Texas, a 14-year-long dispute in Frew v. Hawkins over Medicaid program deficiencies ended in 2007 after the U.S. Supreme Court upheld a trial court order requiring state officials to improve the program, including physician pay.

The Litigation Center of the American Medical Association and State Medical Societies participated in both cases.

Some courts have stopped short of hearing such claims, saying federal Medicaid laws cannot be enforced, said Jennifer R. Clarke, executive director of the Public Interest Law Center of Philadelphia. Her organization assisted in the Florida case and other similar actions.

The Florida plaintiffs cleared that hurdle when a trial judge denied the state's attempt to dismiss the case based on such enforcement arguments and certified the class action in September.

Despite some rulings in favor of states, such lawsuits have prompted positive change, Clarke said. The Oklahoma and Texas cases, for example, pushed those states' Legislatures to bump up physician Medicaid pay.

Although often a last resort, "the courts are helping to put pressure," Clarke said. Still, "we have to have people who want to change the system. ... The goal is to get poor children medical care, and that may mean doing something outside the courts."

Such cases highlight the need for national Medicaid payment reform as a part of federal health system reform, said AAP President Judith S. Palfrey, MD. The organization has endorsed the Florida Pediatric Society's case.

"Without appropriate payment, pediatricians cannot afford to treat Medicaid patients and keep their doors open," Dr. Palfrey said. "This is exactly what we are seeing in Florida, and it is unacceptable. We must do right by our children."