As Washington grapples with debt ceilings and spending, another set of fiscal negotiations quietly begins this week that will impact Floridians for years.
The Legislature voted in May to turn the state's entire Medicaid program over to private managed care. But because the federal government shoulders most of the bills, the Obama administration must give its assent.
At stake are billions of tax dollars and the health of more than 3 million poor and elderly Floridians. The debate around the issue already is dividing along philosophical and political lines.
Democratic legislators wrote a letter this month urging federal officials to veto the program.
Florida already tested managed care — in a five-county pilot project that "has been plagued with problems,'' the Democrats said.
"Now, the legislation calls for expansion of Medicaid managed care plans to all 67 counties … while giving those plans unprecedented flexibility to vary the amount, duration and scope of benefits in confusing and risky ways.''
State Sen. Joe Negron, R-Palm City, countered that managed care is a nationwide trend that can control costs and improve services.
"What Florida is asking for is well within the mainstream,'' said Negron, who spearheaded the legislation. "Hopefully, the current administration will give Florida the flexibility to manage a Medicaid program we can all be proud of.''
But if Washington throws up too many roadblocks, he said, "the federal government commandeering a state budget will be a national political issue.''
Florida's Agency for Health Care Administration is scheduled to submit details of the plan today to the federal Centers for Medicare and Medicaid Services, which will evaluate it, make tweaks and possibly demand revisions. Such negotiations can easily take six months to a year.
By the Legislature's timetable — which Washington need not heed — the state would begin negotiating contracts with managed care companies next July, with actual care starting in 2013.
The new system would divide the state into 11 regions, with as few as two managed care plans in the rural Panhandle and as many 10 in populous South Florida.
Clients would select a plan or be assigned one. Plans would collect a per-client stipend from the state and provide all care through a network of doctors, hospitals and other services.
Plans, often run by insurance companies, could make a profit if they treat clients for less cost. Not-for-profit networks of hospitals, nursing homes and other care providers could also set up their own managed companies.
Critics worry that managed care companies will make money off the backs of the poor by simply skimping on services.
Payment rates already are so chintzy that Medicaid patients struggle to find doctors, said Dr. Mathis Becker, president of the Hillsborough County Medical Association, which opposed the plan with 100 other groups in a recent letter.
"The planned reform is not going to solve this issue and indeed may intensify it,'' Becker said, "because it will empower those Medicaid managed care companies to put on pressure to negotiate for even lower fees for physicians.''
Such fears are not supported by reality, said Michael Garner, president of the Florida Association of Health Plans. Isolated, anecdotal problems have cropped up in pilot managed care programs, he said, but surveys show high levels of patient satisfaction.
There is little evidence to indicate they have not received all medically necessary care, he said. Plus, the new system builds in protections, he said, such as depriving plans of new clients if quality standards aren't met.
A managed care company makes money by keeping clients healthy, Garner said. Skimping on prenatal care for a pregnant woman can lead to expensive, complicated deliveries. Letting a urinary tract infection go unnoticed in a nursing home can lead to expensive hospitalization.
"It's going to drive up our costs if the health outcomes drop,'' Garner said, "and we can get kicked out of the program.''
One of the legislation's most ambitious undertakings is long-term care for disabled and frail old people. Since nursing home bills devastate family finances, Medicaid takes on middle-class clients as well as the poor.
Managed care companies will try to serve most people in assisted living or in their homes, bringing in aides and medical equipment — anything to keep people out of nursing homes.
But in a decade-old pilot program to deliver home-based services — known as Nursing Home Diversion — managed care turned out to be way more expensive than comparable fee-for-service programs run by nonprofit agencies. In some cases, managed care companies spent only 70 to 80 percent of their stipends on patient care, keeping the rest for overhead and profit.
Early versions of the managed care bill capped profits, but not the final version, one reason AARP opposes the proposal.
Profits or no, the new system mandates managed care save the state money, and that's the bottom line, Negron said.
Medicaid costs $22 billion a year and is growing twice as fast as the state budget, "which crowds out education, development and other priorities,'' he said. "Medicaid can no longer have a blank check.''