CMS denies Florida's bid to raise Medicaid cost-sharing

Florida cannot require its poorer Medicaid enrollees to pay premiums or large co-payments, according to a Feb. 9 decision by the Centers for Medicare & Medicaid Services.

The move is a setback for Florida's request to expand Medicaid managed care to nearly all of its 3 million enrollees. The state sought permission to charge a $10 premium for most Medicaid enrollees in managed care and to charge enrollees $100 for each emergency department visit for nonemergency care. The state submitted the requests in August 2011.

States cannot charge premiums to most Medicaid enrollees with household incomes of less than 150% of the federal poverty level, or $28,635 for a family of three, said Vikki Wachino, MPP, director of the Children and Adults Health Programs Group at CMS. The $100 co-pays could be charged to enrollees earning at least 150% of poverty, but the total cost-sharing can't exceed 5% of family income, Wachino wrote in a letter to Florida Medicaid officials. Medicaid covers some pregnant women and infants in families earning more than 150% of poverty in the state.

The Florida Agency for Health Care Administration, the state's Medicaid agency, is disappointed with the CMS decision, said AHCA spokeswoman Meagan Dougherty. However, the state will continue to work with CMS on expanding Medicaid managed care statewide and implementing a long-term-care program.

"We are confident that those programs will move forward as directed by the Florida Legislature," Dougherty said. The state did not project the revenue amounts that the premiums and co-pays were expected to generate, she said.

Wachino wrote that CMS "shares the state's goal of promoting cost-effective use of emergency department services" and will consider alternative approaches to reach this goal.

CMS made the right decision, said Laura Goodhue, executive director of Florida CHAIN, a statewide consumer health advocacy organization. The proposals "would have imposed some hardships on some very low-income, struggling families."

The premiums might have led to dramatic Medicaid enrollment reductions for the state's poorest residents, according to an analysis released in December 2011 by the Center for Children and Families at Georgetown University. Medicaid enrollment declined in 11 states that imposed Medicaid premiums, the study found. No state has charged premiums to children living below the poverty line, but Florida would have, said Joan Alker, a report co-author and research associate professor at the Georgetown Health Policy Institute. "That's why this is a very radical proposal."

Florida lawmakers continue to work on legislation that would limit Medicaid enrollees' visits to emergency departments and even to physician offices, Goodhue said. However, CMS recently advised Washington state that its proposal to limit Medicaid enrollees to three visits for nonemergency care would not meet federal requirements on states to maintain access to care in Medicaid, forcing the state to draft a new plan.

Florida's Medicaid managed care expansion is based on a five-county demonstration program that began in 2006. State-mandated studies of the pilot found that it may have reduced spending but could not determine whether it reduced patients' access to care. The statewide expansion of the pilot would allow private managed care plans to retain the first 5% in savings but require the plans to return the next 5% in savings to the state.