State Politics

Medicaid program feeling tug of change

TALLAHASSEE --In Florida, poverty is big business.

Just look at the Medicaid health care program, which could account for $22 billion in spending in the coming budget year.

It’s the most expensive program in the state budget right now and funds more than 80,000 providers, from large hospitals to podiatrists.

It’s on pace to cover more than 3.2 million poor, elderly and disabled Floridians – 15 percent of the population, including more than a quarter of all children, half of all births and almost two-thirds of nursing-home care.

But with all the increases -- 50 percent over five years -- lawmakers say they have to tamp down costs and improve care. Their solution: require that HMO-like managed-care companies take more control of Medicaid.

Lawmakers also want to trim reimbursement rates and cut some programs, including those for the catastrophically sick. Some hope to expand the use of vouchers for recipients to buy private health insurance, and they would like to use the program to help subsidize health insurance for employees of some private businesses.

“Everyone in this state should care about Medicaid,” said Rep. Matt Hudson, a Naples Republican who chairs the House healthcare budget committee. “It doesn’t matter if you’re in the Medicaid system or not. About 28 cents of every dollar we spend up here is on Medicaid, and chances are that means the system is taking money or affecting other programs that you do care about.”

The HMO industry wants more managed care. Nearly all the other providers don’t – especially nursing homes, hospitals and doctors. So expect a special-interest fight over more than a quarter of the state budget.

Money aside, there’s a partisan dynamic to the debate as well.

Medicaid is a Democratic legacy program, first established in 1965. In the coming years, it would dramatically expand under President Barack Obama’s healthcare

law, which would allow any individual who earns as much as $14,000 a year to gain coverage through Medicaid, a state-federal program. This provision of the law goes into effect in 2014.

Right now, enrollment is limited to poor women, children and severely disabled people. By opening up eligibility, the federal law could boost Florida’s Medicaid enrollment by 1.3 million people in three years, costing the state tens of millions of dollars more.

But Republicans control the state Legislature. And they’re not only committed to denying the Democratic president legislative success – they want to cut expenses from the growing program.

The state Senate’s Democratic leader, Nan Rich of Weston, said Republicans are being inconsistent. She noted that they want to cut provider reimbursement rates -- except for physicians, who get more money thanks to President Obama’s healthcare initiatives.

“They say they hate Obamacare,” she said, “but they’ll happily spend the money.”

When session starts, the Senate’s health budget committee is prepared to vote on its proposal, which is loosely based on former Gov. Jeb Bush’s 2005 Medicaid reform plan, which has been tested in the Fort Lauderdale and Jacksonville areas with mixed results.

Central to the proposal: establishing managed-care companies and networks to provide all care to Medicaid recipients.

Currently, more than half of the state’s 2.9 million Medicaid recipients participate in what’s known as a “fee for service” system in which providers bill the state every time they see a Medicaid patient. It’s seen as a recipe for fraud because it involves tens of thousands of providers, who get paid before the state can even check if the money has been properly spent.

Under a managed-care system, the HMOs and physician services networks receive a capped amount of money, thereby forcing them to tamp down on expensive treatments to ensure they earn a profit.

But managed-care companies can still be guilty of fraud. One of the state’s largest Medicaid providers, Tampa-based WellCare, has agreed to pay $80 million to

the federal government to settle fraud charges. Another $137.5 million settlement with the state is pending.

The Senate’s plan envisions dozens of managed-care plans providing services in 19 regions. The House plan, left over from last session, relies on fewer managed-care companies providing more services in only six regions of the state.

The politically influential doctor lobby, the Florida Medical Association, seems more comfortable with the Senate approach because it could give doctors more of an opportunity to form their own local provider networks, said Timothy J. Stapleton, FMA executive vice president “If there is a level playing field that allows physicians to be more involved in managing patients’ care,” he said, “the FMA would be more comfortable.”

Both House and Senate proposals would require nursing homes to provide managed care or contract with an HMO-like plan – something that nursing home providers, doctors and hospitals say skimps on care.

“We want to get out of the check-writing business and into the compliance business,” said Sen. Joe Negron, the Stuart Republican who chairs his chamber’s health budget committee.

Negron’s bill also proposes to deeply cut a program known as the “Medically Needy,” which serves transplant patients and the catastrophically sick. Negron also wants to change the name of the program. The cuts to the program and provider rates would save about $1 billion next year, Negron said.

Hospitals, however, aren’t so sure. They worry that sick people without healthcare will just get sicker and wind up at emergency rooms, costing taxpayers more.

“Medically Needy people are extremely ill,” said Tony Carvalho, president of the Safety Net Hospital Alliance. “They have cancer, or heart problems or need

transplant medications. I don’t know if the pharmacy is going to be giving those drugs away for free or for a discount. So what happens to these people?”

The managed-care industry says they’ll be taken care of. And so will taxpayers because state officials will be able to focus on a limited number of managed-care companies, instead of regulating tens of thousands of providers.

“If the state doesn’t have to chase down 100,000 providers, they can increase the monitoring of health plans, improve health care and cut down on costs,” said Michael Garner, president and CEO of Florida Association of Health Plans.

“We need more eyes on the ball in Florida,” he said.