Florida moves toward Medicaid managed care

The Florida Legislature continues to move toward an overhaul of the state's Medicaid program that would shift most enrollees to managed care plans. A proposal in the Florida House would launch mandatory managed care in Miami-Dade County and go statewide over five years, dividing Florida into six competitive, geographic regions. Late last week, the architects of the House plan approved roughly three dozen changes designed to allay provider concerns, win votes in the House and position the proposal for negotiations with the Senate, reports Health News Florida. Among the most significant changes: Legislators revised a provision that would have forced hospital staff physicians to contract with Medicaid HMOs. With the change, hospitals would only have to craft "adequate arrangements for medical staff" to fulfill hospital contracts with HMOs.

The Florida House is expected to vote today on the Medicaid reform plan, which is incorporated into two separate bills. If these bills pass, negotiations with the Senate could take place during the last two weeks of the legislative session. The Florida Senate previously approved a proposal to expand a pilot managed Medicaid program in Broward, Duval, Nassau, Clay and Baker counties. This expansion would impact 19 additional counties and include metropolitan areas such as Miami, Orlando, Tampa and St. Petersburg.

A draft report from the state's Agency for Health Care Administration shows that traditional Medicaid fee-for-service (i.e., MediPass) enrollees with chronic diseases have two to three times higher utilization for some services than Medicaid managed care enrollees. However, opinions differ whether higher utilization equates to overutilization of traditional Medicaid services.

"This absolutely supports all our arguments," says Michael Garner, president and CEO of Florida Association of Health Plans. "MediPass is not coordinated, has overutilization, and leads to rampant fraud and abuse."

However, the "much more reasonable conclusion" is that Medicaid HMO enrollees with chronic diseases are enduring underutilization, says Greg Mellowe, policy director for the Florida Community Health Action Information Network. Case mix could also be a factor because the sickest enrollees usually aren't enrolled in Medicaid managed care plans, adds Tallahassee-based healthcare consultant Brady Augustine.

In related news, Coral Gables, Fla.-based Simply Healthcare Plans is poised to make inroads in the Medicaid HMO market with the pending acquisition of nonprofit HMO Total Health Choice, reports the South Florida Business Journal. At year-end 2009, Total Health Choice had 40,421 enrollees, primarily Medicaid members in Miami-Dade and Broward counties. The HMO suffered the worst loss of any Florida HMO last year, losing $14.3 million on premiums of $80.3 million in 2009, according to Minneapolis health insurance expert Allan Baumgarten. Simply Healthcare has no immediate plans to change either plan benefits or the provider network. The company expects to increase Total Health Choice's negotiating power through the acquisition of additional HMOs.

Simply Healthcare Plans was launched in 2009 by insurance veteran entrepreneur Miguel "Mike" Fernandez and $150 million in investor money, reports the Miami Herald. Fernandez previously founded two health plans - Physician Healthcare Plans and Care Plus Health Plans--before selling them to national insurers.

To learn more about Florida's Medicaid managed care proposals:
- read this Health News Florida article

To learn more about the Agency for Health Care Administration study:
- read this Health News Florida article

To learn about the Total Health Choice purchase:
- read this Miami Herald article or this South Florida Business Journal article

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