State Politics

Florida health-reform plan empowers growing Medicaid

TALLAHASSEE — Large HMOs will have more power than ever in Florida’s growing Medicaid program under a major health-reform package that cleared the House on Monday.

The goals are lofty: Stop rampant fraud, reduce skyrocketing costs and improve healthcare for the almost 2.8 million poor, elderly and catastrophically sick Floridians served by Medicaid.

The success of the bill hinges on the philosophy that private companies do a better job managing public health benefits than the government or individual Medicaid providers, who see patients on a pay-as-you go basis in what is known as a “fee for service’’ system.

By largely ending fee-for-service, the proposal so fundamentally changes Medicaid that almost every lobby — hospitals, doctors, insurance companies, homes for the developmentally disabled, pharmacists — has voiced concerns.

“You know what they said: Don’t move my cheese. Don’t move a system that I can make money off right now,” said state Rep. Dean Cannon, R-Winter Park, who chaired the House committee that drafted the bill.

“Where we find ourselves today is with a Medicaid system that is broken,” said Cannon, who fears the system will become more expensive for taxpayers under the federal healthcare reform program, which expands Medicaid eligibility.

Republicans and many health-policy experts say managed care saves Medicaid money.

In fee-for-service, the system is designed to pay providers quickly, and it doesn’t discourage them from ringing up the most expensive treatments — which can lead to fraud and overbilling. Unlike the fee-for-service system, managed-care companies are paid a capped amount of money to manage health services for recipients. If they can keep a recipient healthy, the HMOs profit.

But Democrats say HMOs have a financial incentive to skimp on treatment. They said it was a mistake to give health management organizations so much power over the $19 billion program that serves almost 15 percent of Florida’s population.

“Medicaid dollars are going to be siphoned off to corporations for profit,” said Rep. Elaine Schwartz, D-Hollywood, a longtime critic of HMOs.

Schwartz pointed out that the results of former Gov. Jeb Bush’s Medicaid reform program are starting to come in only now. Begun five years ago, Bush’s reform ended fee-for-service Medicaid for children and some senior citizens. The program was tested in Broward, Duval, Nassau, Clay and Baker counties.

Under Bush’s reform, companies were given “risk-adjusted rates’’ that paid them more to manage the health of a sick person and less to manage healthy people.

The reform also established a special “enhanced benefits’’ fund that recipients could access to buy health goods — but only if they demonstrated healthy behavior, such as quitting smoking or getting frequent doctor check-ups.

The House bill, dubbed “CannonCare’’ by some Democrats, adopts the risk-adjusted premiums, the enhanced benefits fund and the drive toward managed care, which currently accounts for about 40 percent of the Medicaid program.

Bush’s reform would expand to 19 counties — including Miami-Dade and Palm Beach, Hernando, Hillsborough, Pasco, and Pinellas — under one Senate plan.

Staff writer Sara Kennedy contributed to this report.