3 of 4 state insurance providers reach settlement in HMO dispute

TALLAHASSEE — The state Department of Management Services has reached a settlement agreement with three of the four insurance providers challenging changes to HMO coverage for state workers.

The new policy requires awarding HMOs contracts to the lowest single bidder in each of the state's 67 counties instead of allowing employees to pick from two or three companies.

After opening the contracts for bid in June, DMS chose AvMed in late July to serve 38 counties, up from 30 under the previous plan. United HealthCare was awarded contracts for only 18 counties, down from 67. Coventry's coverage area was set to drop from 26 to four counties. And Florida Health Care was slated to drop from two counties to zero. The change is part of the department's efforts to rein in health care costs.

Four HMO carriers — United HealthCare, Coventry, Florida Health Care Plans and Aetna — protested those recommendations, starting an administrative legal process.

Coventry, Florida Health Care Plans and Aetna voluntarily dismissed their petitions after reaching a settlement with DMS. Under the agreement, Florida Health Care Plans will be offered as a second HMO in Flagler and Volusia counties, after lowering rates as part of the settlement agreement. Coventry will be offered as a second HMO in Broward, Miami-Dade, Palm Beach and St. Lucie counties. Aetna will be the sole HMO in Brevard County.