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Florida lawmakers poised to boost role of HMOs in Medicaid overhaul

TALLAHASSEE — HMOs and large health care networks are close to managing nearly all of Florida's $22 billion Medicaid program under an overhaul plan that surfaced in the final days of the lawmaking session.

The Medicaid reform plan, released and debated late Thursday after weeks of secret talks between House and Senate leaders, would require managed care companies to share profits, ban illegal immigrants from receiving benefits and give recipients the option of using a voucher to purchase private health insurance.

Sen. Joe Negron, the Republican sponsor from Stuart, said managed care would save money, improve care and transform Florida into a dynamic health care market.

"With $22 billion up in the air, we'll have plenty of people coming to do business in Florida," Negron said, noting that HMOs that try to leave the state would be fined and blocked from doing business in Florida.

In all, the Medicaid proposal would affect 3 million Floridians and puts the state in position for the eventual changes that the federal government will require under Medicaid rules. The program could eventually serve one in four Floridians.

The federal government, which underwrites more than half of Medicaid's costs, would have the ultimate say on any changes Florida seeks. If approved, the Medicaid reform program would start up in July 2012.

For the first time ever, nursing-home recipients and all other elderly Medicaid recipients would be under managed care companies. Developmentally disabled Medicaid recipients would also be under managed care in five years.

Also for the first time, people who sue Medicaid doctors and hospitals would have their pain-and-suffering awards limited to $300,000 per case — far less than conventional medical-malpractice awards.

"We're not treating people equally," Sen. Arthenia Joyner, D-Tampa, said in opposing the lawsuit limits. "Why is that, if you are poor, you are not entitled to the same pain and suffering damages as the rest of us?"

But Negron said Medicaid doctors and hospitals should get extra protection from lawsuits because they're performing a public service.

The bill is to be voted on by the Senate today and is expected to pass, with Democrats more likely to oppose it. It's a priority of House Speaker Dean Cannon and it is expected to pass his chamber.

The proposal is loosely based on a Medicaid reform plan instituted in 2005 under former Gov. Jeb Bush. It caps expenditures for each recipient and gives managed care companies more money to treat sick people and less money to treat those who are healthier. Proponents say managed care saves money because the insurance company tracks patients, receives pre-approved treatments and makes sure they don't overuse medical services.

Currently, about 60 percent of Florida Medicaid patients have their care managed by HMOs, or doctor and hospital networks. The remaining recipients see any Medicaid doctor who will receive them under what's known as a "fee-for-service" system in which a provider can bill for each service.

Negron said fee-for-service leads to a "pay and chase" system in which fraudsters bill for phony services and then disappear when auditors try to see what happened to the money.

But HMO opponents say managed care companies profit by skimping on care. They also note that Tampa-based WellCare had been busted for fraudulently claiming that it was spending money on patient care when it wasn't.

Negron's original Medicaid bill called for a "medical-loss ratio" formula that would guarantee managed care companies pay a certain proportion — as much as 90 percent — on health care. The HMO could use the remainder for profits and administration. But the House insisted on a new profit-sharing formula that the HMO industry favored. Few understand it.

Last week, the federal government advised the state to adopt a medical-loss ratio. Negron, though, said the profit-sharing proposal was better because it gives private companies a financial incentive to do a better job.

Sen. Eleanor Sobel, D-Hollywood, said the state should follow the federal government's advice.

"We're not going in that direction," she said. "Why not?"

Said Negron: "It's a bolder, more entrepreneurial approach, saying we're in business together."

Marc Caputo can be reached at

Florida lawmakers poised to boost role of HMOs in Medicaid overhaul 05/05/11 [Last modified: Thursday, May 5, 2011 9:55pm]
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