Senate Medicaid bill would cap costs, use HMO-like plans

Orlando Sentinel
February 17, 2011
TALLAHASSEE, FL

The Florida Senate will cap soaring Medicaid costs by shifting millions of poor and sick people into HMO-like health plans, charging for doctor and hospital visits, and banning illegal immigrants from getting care through the rapidly growing program.

The program would increase payments to physicians – who have long complained they are underpaid by Medicaid – but would also impose co-payments and other restrictions on patients seeking care. Beneficiaries could also be required to take smoking-cessation or weight-loss classes.

The reform proposal unveiled Thursday also spells out a time-frame for seceding from the health-care plan by the end of 2011 if the federal government doesn't approve the cost-cutting measures.

The reform, which dramatically expands the state's 2005 reform pilot project in Broward and several Northeast Florida counties, got its first hearing Thursday as lawmakers grapple with how to contain its $20 billion-and-growing price tag. The House has yet to unveil its own version, but Republican leaders in both chambers have made Medicaid reform a high priority mission this year.

Last year's House plan carved up the state into six regions and would have required managed-care companies to bid on serving patients in the entire region.

The Senate plan breaks the state into 19 regions, giving managed-care organizations more flexibility to target more lucrative populations.

The core concept behind the push would be to stop paying locked-in fees for each medical procedure.

Critics say that the current "fee for service" system leads to over-utilization of health-care and rampant fraud.

Instead, for-profit health-maintenance organizations, physician networks or other managed-care organizations would be paid capped dollar amounts to treat people, theoretically containing costs in a program that has swelled to cover 2.9 million people.

The changes are being billed as a way to shave $1 billion off next year's projected $22 billion price-tag.

"We want to get out of the check-writing business and into the contract compliance business," said Senate Health Care budget chief Joe Negron, R-Stuart. "It is a fundamental shift."

The five-year-old pilot project in Broward was launched by then-Gov. Jeb Bush, and has shown mixed results. Studies have suggested it did contain costs, but it did not stimulate much private-market competition and created some confusion among patients.

The experimental project excluded seniors -- who are among the most expensive patients to care for – while the new plan would include them.

Democrats Thursday expressed misgivings with putting seniors into HMO-like companies that have a financial incentive to shift elderly patients into costly nursing homes.

"I really believe managed care is not the way to go for this population," said Senate Democratic Leader Nan Rich, D-Weston.

But Republicans said the reform allowed other options besides just HMOs, such as doctor networks that might be willing to participate.

"If this were only an HMO bill, I would vote against it. I would be on the other team," said Sen. Don Gaetz, R-Niceville.

Medicaid covers 27 percent of all Florida children and 63 percent of all nursing-home residents. The blind, disabled and elderly made up 32 percent of the people covered by the program last year but accounted for 61 percent of the costs.

Among the Senate bill highlights:

It would require most of the state's 2.9 million Medicaid patients to be shifted into managed-care plans through companies like HMOs. Some populations would be excluded from mandatory enrollment, including the developmentally disabled; nursing home residents; women eligible only for family planning services, breast or cervical cancer services; and sick children.

The reform limits Medicaid eligibility to legal residents, and could require patients to pay a $10 monthly premium and take smoking-cessation or weight-loss classes.

It limits people in the Medically Needy program – people with high medical costs whose income exceeds Medicaid eligibility limits -- to receiving only physician services and renames the program the "Medicaid Non-poverty Medical Subsidy Program."

Parents whose income exceeds the federal poverty limits – currently $22,050 for a family of four -- could have to pay a "sliding scale" of fees for their children to be covered.

Doctors who treat Medicaid patients would be reimbursed at 100-percent of the rate paid by the Medicare program for seniors, which is roughly double what they get now.

Medicaid patients would have to make a $3 co-pay for specialty physicians and a $100 copayment for non-emergency services provided by a hospital emergency room.

The plan also spells out a timeline for breaking out of the state-federal Medicaid program if the federal government does not approve the changes by the end of 2011.

If Florida breaks away and the feds stop paying their majority-share share -- $12 billion this year -- the state would prioritize services for nursing home care, pregnant women, doctor and hospital visits, and babies or children in state custody.

Negron said he was encouraged that the federal government would work with the state because it was allowing others like Arizona to start dropping benefits.

"We're not asking to do outrageous things. We're asking to do common-sense things ... that are going on every day in businesses," Negron said, calling it "extremely doubtful that the federal government would not work with us."

If the federal Department of Health and Human Services does not OK the move, he said, "we'll continue to run our program in Florida with the resources that we have."

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