Florida's shift to private managed care means longer Medicaid waiting lists, study finds

Published Feb. 1, 2012

When the Legislature decided last year to cap Medicaid funding and turn long-term care over to private managed care companies, some experts warned that growing waiting lists would drive people into expensive nursing homes.

A study released Tuesday by the Legislature's own policy analysts underscores that fear.

Florida has three main Medicaid programs that divert people from nursing homes by providing home health care, aides for chores, assisted living and other services. One uses a for-profit, managed care model.

Waiting lists for those programs rose 30 percent last year, the Office of Program Policy Analysis and Government Accountability reported. Meanwhile, the cost of the managed care program was significantly higher than the two traditional nonprofit programs.

Yet Florida is now asking the federal government to eliminate the less expensive programs and turn all at-home services over to managed care beginning in 2013.

The enabling legislation, which passed last session, would cap spending below current levels, adding clients on the waiting lists when the money runs out.

"The reality is that as those waiting lists grow, there are going to be people on those lists who simply can't wait,'' said Laura Summer, a researcher for Georgetown University's Health Policy Institute. "I think we'll see more people in nursing homes.''

The House budget for the coming year would add about 3,000 new slots for the at-home programs, noted Katherine Betta, aide to Speaker Dean Cannon.

Also, other states that shifted to comprehensive managed care increased at home services while reducing nursing home usage, she said.

This shift may or may not save money depending on whether savings are used to serve more people, Betta said, "but (it) will certainly be a better way to meet people's needs.''

Federal Medicaid officials are now examining Florida's request for a major overhaul. According to a Georgetown study released this month, several key questions remain.

Even middle-class people can qualify for Medicaid in a nursing home when they cannot take care of themselves. Federal law entitles them to that benefit whether the Florida Legislature wants to fund them or not.

If the new Medicaid model leads to longer waiting lists and more people in nursing homes, how are managed care companies going to pay for that care, save the state money and still make a profit?

Other states that shifted to managed care simultaneously boosted their at-home care budgets, Georgetown reported. Florida intends to cap spending while eliminating traditional programs that have outperformed managed care.

In fiscal year 2010-2011, the Aged and Disabled Adult program cost $794 a month per person, the legislative analysts reported. The Assisted Living for the Elderly program cost $853, while the managed care Nursing Home Diversion program cost $1,427.

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This is not a straight apples-to-apples comparison. The managed care program shoulders extra costs for hospital care, drugs and other services. But when the legislative analysts adjusted for those extra costs in a 2010 report, the managed care program still cost about 34 to 54 percent more.

"Our concern is that we are going to have a larger elderly population and are still limiting the number of people'' served at home or in assisted living, said Jack McRay, advocacy manager fro Florida AARP. "People will be faced with going into the nursing home or not get any service.''