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Florida Medicaid reform embraces controversial push toward managed care

TALLAHASSEE — More HMOs. Less care for transplant patients. Lawsuit limitations.

The Medicaid reform bill passed Thursday along party lines in the Florida Senate's budget committee is so loaded with controversy that parts of it won't pass the Florida House. Or the federal government, which pays for more than half the program, could reject the plan entirely.

Like a House bill, the Senate plan seeks to reduce long-term costs by turning over nearly all of the management of the system to HMOs and other managed-care companies throughout the state.

At stake: $22 billion in spending and a health system that will soon oversee 3 million Floridians.

Sen. Joe Negron, the plan's architect, said more than two-thirds of Medicaid patients are already in managed care, which shouldn't be a dirty word.

"You know who else is in managed care? The taxpayers who are writing the checks for people who receive Medicaid benefits," Negron, R-Stuart, said. "We started with a premise that the benefits we pay for our friends and neighbors in Medicaid shouldn't be lower than the people who pay the bills. But they shouldn't be higher."

Negron repeatedly said the bill doesn't just expand the role of HMOs. It would allow doctor- and hospital-based networks to manage the care of Floridians as well.

By transitioning to managed care, the state will end what's known as a "fee-for-service" system in which the state pays about 80,000 providers for each service they perform. More services mean more fees — and more cost. It also can lead to fraud — estimated at more than $1 billion — because the state pays first and asks questions later.

Under a managed-care system, insurance companies will receive a capped amount to serve a patient. It's easier for the state to manage a few dozen companies rather than tens of thousands of providers and hundreds of millions of claims. But HMOs can commit fraud, too, as happened with Tampa-based WellCare, which set up a dummy company to hide profits and spend less on health care.

Negron said he envisions multiple managed-care companies competing for patients throughout the state.

That vision is nothing new.

Five years ago former Gov. Jeb Bush outlined his plan to have multiple managed-care companies compete for patients, who would have an array of choices. It didn't happen.

First, lawmakers whittled the plan down from a statewide effort to a five-county experiment in Broward County and the Jacksonville area.

Then, a number of big HMOs withdrew from the program because the state began paying managed-care companies based on the type of patients they served. The sicker a person, the more money a company received for treatment. Healthier people had lower premiums.

Because the HMOs had managed to largely cleanse their rolls of sick patients — and thereby profit off of serving a healthier client base — they could no longer get a big return from the state. So they fled test counties.

Now, five years later, it remains unclear if Bush's Medicaid Reform proposal worked. Preliminary studies suggest that costs are marginally lower, patients are scoring relatively higher on a checklist of state health indicators and patient satisfaction with care isn't that much different.

But all the data isn't in. And it's unclear if the savings have resulted from companies skimping on care.

"I have a major problem with doing a massive expansion of a managed-care experiment that, four and a half years later, we don't know if it works," said the Democrats' leader, Sen. Nan Rich, who supported Bush's Medicaid program in 2005.

Democrats, politically aligned with trial lawyers, also chafed at the Medicaid bill's proposals to limit lawsuits against some private medical school personnel, developmental-disability group homes and nursing homes.

Randolph Gray, a Madison County resident, spoke against the liability limits, pointing out that both his parents died in separate nursing homes because of severe neglect.

"It is wrong to limit the rights of Floridians to have their voices heard in the one place open to all — the courts," Gray said.

Negron said the lawsuit limitations weren't too strict and made sense because Medicaid providers are acting as agents of the state, so they should receive state protection.

The House Medicaid bill has fewer lawsuit limits, which are likely to pass. But major differences remain between the two bills.

The Senate calls on the state to withdraw from the Medicaid program if the federal government doesn't approve its changes — a proposal that could cause the state to lose up to $12 billion in federal money.

House Speaker Dean Cannon has said that proposal is a nonstarter.

The House breaks up the state into fewer regions — eight — rather than the Senate's 19. The Senate wants multiple plans in the regions. The House wants to limit them.

A big sticking point: The Senate wants to deeply cut and rename a program called the Medically Needy, which provides transplant and cancer patients with expensive medicines.

Cannon, echoing hospitals and advocates for Medically Needy, said it makes little sense to cut the program only to see the recipients end up at the hospital, where their illnesses become harder and more expensive to treat.

"The House budget will not adopt strategies to control Medicaid spending that result in cost shifts," Cannon said earlier this session. "We will not offer phantom cuts based on unproven efficiencies."

Florida Medicaid reform embraces controversial push toward managed care 04/14/11 [Last modified: Thursday, April 14, 2011 11:51pm]
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