The Associated Press February 17, 2010, 12:27PM ET

Medicaid revamp faces obstacles in Florida

With Medicaid costs now consuming 26 percent of Florida's budget, the upcoming session seems primed for a program overhaul. But legislators will tackle the issue amid a foundering pilot program, a class-action Medicaid lawsuit that could cost the state millions, all while waiting to see if and how a federal health bill will affect the state.

Reining in the program for low-income and disabled patients has been discussed, with little change, for years. But with Florida's sour economy driving Medicaid enrollment to an all-time high, lawmakers say they have no choice this session. The state expects to pay $17.9 billion to serve 2.6 million recipients -- one out of every seven residents -- and an 11 percent increase from last year.

"At the current trend line Medicaid spending is unsustainable. We simply can't afford to do it the way we're doing it now," said Rep. Matt Hudson, R-Naples, vice chairman of the Health & Family Services Policy Council.

Despite widespread complaints from patients and doctors and unflattering reviews from various studies, expanding Florida's Medicaid reform program is still a viable choice, especially after Gov. Charlie Crist said he's open to broadening it. The governor has not offered support for any of the existing ideas being discussed, according to Crist's spokesman Sterling Ivey.

Under the pilot program, which is in five counties including Broward and Duval, the government pays private companies a set amount for handling a specific number of residents -- similar to a health maintenance organization in the private sector. The companies, in turn, decide how to care for the patients, including which doctors they can see and what medicines and treatments can be prescribed.

Senate President Jeff Atwater, R-North Palm Beach, says he supports expanding the program because it has dealt with escalating prices and changed behaviors by setting up patients with a primary care doctor to prevent unnecessary emergency room visits. He said the Legislature should discuss how the program should be modified and what counties should be included next.

Paul Duncan, a University of Florida professor of health services research, said the pilot is "not the kind of panacea that would solve all of Medicaid's problems in one fell swoop, nor is it the kind of train wreck that some people feared."

Nearly four years into the program, there are small reductions in expenditures, but it's unclear whether the savings stem from providers offering less care or because they're delivering it more efficiently, according to the UF study. Overall, Medicaid recipients' satisfaction levels do not differ dramatically pre and post reform.

"The problems of managed care are amplified in Medicaid reform. The key is how much flexibility they gave HMOs," said Greg Mellowe, policy director for Florida CHAIN, a group that promotes the rights of Medicaid patients. He cited patients who struggle to get appointments with specialists and finding plans that cover both their doctors and prescriptions. "I'm concerned about a model that gives plans all the cards."

One provider admitted pocketing money that was supposed to be spent on patient care and covering it up through bogus expenditures, allowing them to keep that surplus. WellCare has repaid the state $35 million. The company later agreed to pay another $80 million along with independent monitoring to resolve other health care fraud charges.

If legislators don't expand Medicaid reform, they could still switch the state's remaining Medicaid patients into HMOs and Provider Service Networks -- a group of doctors or hospitals that treat patients. Both are operating in Medicaid reform, but patients can choose which plan they want to use.

"Tell me one time when the state came back and said how much money they're saving with HMO's? All I've heard is we need more money to continue doing what we're doing," said Andy Behrman, president and CEO of Florida Association of Community Health Centers.

Rep. Ed Homan, R-Tampa and an orthopedic surgeon, is sponsoring a bill backing a pilot program where each Medicaid patient would have ongoing relationship with a primary care doctor who coordinates treatment with specialists.

If the bill passes, the state health agency would seek a federal waiver to fund the program and pick participating counties. The counties would likely be ones with medical schools that could be linked with primary care clinics.

An outspoken critic of the Medicaid pilot program, Rep. Elaine Schwartz, D-Hollywood, says Homan's proposal offers the best care for patients at the best price.

"The manager of your care is your doctor. It's not a profit-driven insurance company whose own goal is a fat bottom line, not helping patients," said Schwartz, who is sponsoring a bill to limit HMO administrative fees in Medicaid to 15 percent.

But she's worried the program, called a medical home model, doesn't have enough of an economic engine to get pushed through under the current leadership.

"I don't see an existing industry making a buck on medical home model," she said. "You don't have HMOs or some financial industry that see themselves benefiting from it."

Also complicating Medicaid this session is a class-action suit against the state's program that is being tried in Miami federal court and will likely drag on for months. The suit, brought by Florida Pediatric Society, the Florida Academy of Pediatric Dentistry, claims about 1.2 million children are not getting access to critical medical care due to low reimbursement rates. A judgment to raise those rates could cost the state millions.

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Associated Press Bill Kaczor contributed to this report in Tallahassee.


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