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Florida Legislature Passes Massive Medicaid Overhaul

May 08, 2011

This story comes from the News Service of Florida.

Arguing that the proposal will save tax dollars and improve patient care, Republican lawmakers Friday approved a massive overhaul of Florida's Medicaid system.

The proposal, which has been debated for more than year, would eventually shift hundreds of thousands of poor and elderly beneficiaries into HMOs and other types of managed-care plans.

Supporters say that would hold down spiraling costs in the $20 billion program, while also improving a fragmented system of care.

"We get to save billions of dollars, and we get to deliver better health care,'' said House sponsor Rep. Rob Schenck, R-Spring Hill.

Florida's Medicaid Managed Care

Read more about Florida's proposed shift to Medicaid managed care.

But the proposal drew opposition from Democrats, who questioned whether it would adequately hold HMOs accountable and whether it would stick Medicaid beneficiaries with costs they can't afford.

But the proposal drew opposition from Democrats, who questioned whether it would adequately hold HMOs accountable and whether it would stick Medicaid beneficiaries with costs they can't afford.

"This sucks,'' Rep. Charles Chestnut, D-Gainesville, said after listing a series of problems he saw with the proposal, which is spread across two bills.

The bills (HB 7107 and HB 7109) now go to Republican Gov. Rick Scott, who has supported a shift to managed care.

But even if Scott signs the bills, they still face a major hurdle: The federal government, which pays more than half of the Medicaid program's costs, would need to sign off.

Florida will have to seek what is known as a Medicaid waiver to carry out various parts of the overhaul. But that can be a long and complex process, as evidenced by a still-pending waiver request that the state filed last year to continue a pilot managed-care program.

Democrats focused, in part, Friday on issues that will get federal scrutiny. As an example, the plan would seek federal approval to require beneficiaries to pay $10 a month in premiums and to impose $100 co-payments on beneficiaries who seek non-emergency care in hospital emergency rooms.

"You know these people don't have money,'' Chestnut said.

But Schenck said the $100 co-payment proposal is designed to help dissuade people from using emergency rooms for routine care. Such emergency-room visits are more expensive than getting treated at doctors' offices or urgent-care centers.

The Republican-dominated House passed the bills Friday night by votes of 79-39 and 80-39. Hours earlier, the GOP-controlled Senate voted 28-11 and 26-12 to approve them.

The proposal would rely on HMOs and other types of plans known as provider-service networks to manage the care of Medicaid beneficiaries. Currently, many Medicaid beneficiaries are enrolled in managed-care plans, but others get care through a fee-for-service system that involves the state making payments to tens of thousands of medical providers.

The overhaul would require managed-care enrollment by October 2013 for seniors who need long-term care and by October 2014 for a broader Medicaid population such as women and children. House and Senate negotiators decided against requiring Medicaid beneficiaries with developmental disabilities to enroll in managed care.

Senate sponsor Joe Negron, R-Stuart, said the changes will lead to treating Medicaid beneficiaries like people who get health insurance through employers.

"We're saying, we're not going to treat you like you have an 'M' stamped on your head,'' Negron said.

But critics pointed to problems in the five-county Medicaid pilot program that started in 2006. Senate Minority Leader Nan Rich, D-Weston, said it remains unclear whether that pilot saved money, and it has faced problems with managed-care plans pulling out of counties.

"At this point, we have no definitive answer as to its success,'' Rich said.

House and Senate Republican leaders have vowed for months to transform the Medicaid system, but lawmakers did not approve the bills until the final hours of the annual legislative session. Negotiators unveiled an agreement Thursday, after days of behind-the-scenes talks.

The proposal would carve the state into 11 regions, with managed-care plans competing for contracts in each area.

It includes a series of steps aimed at ensuring the plans provide quality care. Among other things, it would impose penalties on plans that withdraw from the regions before their contracts expire --- situations that can cause upheaval for patients.

But opponents questioned whether the proposal goes far enough in holding plans accountable. They said the proposal should include a "medical loss ratio,'' which would require the plans to spend a certain percentage of money they receive on patient care.

Instead, House and Senate negotiators decided to use a system in which HMOs would share with the state profits above 5 percent. Describing the plans as "business partners,'' Negron said they will be closely audited to verify their profits and finances.

"I think we should look at Medicaid in more of an entrepreneurial way,'' Negron said.

But federal officials indicated in a letter to the state last week that they want a medical-loss ratio. Sen. Eleanor Sobel, D-Hollywood, said such a ratio would ensure that vulnerable Floridians get services, "not just lip service.''

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