Medicaid managed care close to becoming a reality in Florida

Democrats and patient advocates worry that Medicaid cost savings will come at the expense of patients.

By Doug Trapp — Posted April 15, 2011

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The Florida House on March 31 easily approved legislation that would change the state's Medicaid program from its hybrid of HMOs, fee-for-service payment and health professional networks to a system requiring nearly all enrollees to choose a managed care network.

Since 2010, the Florida Legislature has been working on measures to unite the state's $20 billion Medicaid program under managed care. State GOP lawmakers -- with majorities in the House and Senate -- said managed care would curtail fraud and make state Medicaid spending more predictable. Florida Gov. Rick Scott also supports this goal. The Florida Senate is crafting its own, similar version of the legislation that's expected to be approved within weeks.

"For the past several years, Medicaid has plagued our budget, and this year alone it has consumed one-third of general revenue," said Rep. Robert Schenck, the House bill's sponsor and chair of the House Health and Human Services Committee. This legislation not only will control costs, but also will improve access to coordinated, quality care, he said.

But Democrats in the Legislature and patient advocate organizations are skeptical that Medicaid patients will benefit from the switch to managed care. Pilot managed care networks that began in 2006 have saved some money, but the savings may have come from reducing care instead of quality improvement, according to state-sponsored analyses by the University of Florida.

"This is a massive shift to for-profit, capitated care that will reduce the scope, amount and duration of care," said Rep. Mark Pafford, the highest-ranking Democrat on the House Health Care Appropriations Subcommittee.

The House bill would require the state's 2.9 million Medicaid enrollees to sign up with HMOs, networks of physicians and hospitals, or other managed care networks, which would assume financial risk for caring for enrollees. In exchange, the networks could keep the first 5% profit, would share the next 5% with the state, and would return any profits above 10% back to the state, said Katherine Betta, spokeswoman for House Speaker Dean Cannon.

The House bill includes improvements to the Medicaid pilot project, Betta said, such as offering physician pay incentives and strengthening network adequacy requirements. The state will select at least three and no more than 10 managed care networks to handle different regions of the state.

The House bill has language on patient-centered medical homes but no concrete proposals, which the Florida Academy of Family Physicians would prefer, said Tad Fisher, the academy's executive vice president.

Another House bill provision would establish a $300,000 cap on noneconomic damage awards in Medicaid patient lawsuits. Medicaid fees, which stand at 56% of Medicare rates, would be negotiated between physicians and managed care networks. The Senate bill, however, would increase Medicaid pay to Medicare rates, Fisher said.

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