Florida lawmakers pass historic Medicaid overhaul

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TALLAHASSEE, Fla. — Two historic bills enacting sweeping changes to Florida’s Medicaid program won Senate and House approval Friday, placing the care of nearly 3 million beneficiaries in the hands of private companies and hospital networks.

The bills inject sorely needed accountability into a statewide managed care program that has faltered in its current state in five pilot counties.

The plan’s detractors say for-profit providers are making money scrimping on patient care. Patients have complained they couldn’t get appointments with specialists. Several providers pulled out of the program, causing lapses in care as patients were bounced among plans.

Sen. Joe Negron, who spearheaded the overhaul, said leaders have learned from the pilot program’s shortcomings and includes increased oversight and more stringent penalties, including fining providers up to $500,000 if they drop out.

The bills (HB 7107 and HB 7109) also require providers to generate a 5 percent savings the first year, which could save the state about $1 billion.
“Patients are in charge, doctors are in charge. We want to work to keep costs down,” said Negron. “I think this agreement does that.”

Lawmakers on both sides worked long hours in closed-door meetings to reach a last-minute deal that passed in the House on the session’s final day. Proponents say the bills will mitigate rising Medicaid costs that now top more than $20 billion a year.

Gov. Rick Scott, a Republican who made millions as a health care CEO before his election, is expected to sign the bill. Federal health officials still have to sign off before the state can proceed.

A major sticking point in the debate was whether the developmentally disabled population would be included. They are exempt and will operate for three years under an ‘I Budget,’ which offers patients more flexibility.
“This represents the most comprehensive reform since Medicaid was passed,” House Speaker Dean Cannon said. “This was a Herculean task. It was not easy. It was complex.”

House leaders worried the Agency for Health Care Administration would struggle to oversee the massive transition and enforce penalties. Five years after the pilot program started in 2006, state health officials said they have not tracked what services patients were denied. And there is little data showing whether the savings were because services were delivered more efficiently or because patients were getting less care.

The measures include $2 million to assist the agency with the overhaul, said Rep. Rob Schenck.

Under the plan, patients would pay $100 for hospital visits and $10 monthly premium per person or family.

“You know these people don’t have money. How is this a good plan for poor people and are we really looking out for these people’s best interest? No, I don’t think so,” said Rep. Charles Chestnut, D-Gainesville, who voted against the bills.

The plan divides the bill into 11 regions where managed care plans and hospital networks will bid on contracts to serve certain regions.

Critics worry the regions are too large and that patients will have to drive long distances to see doctors. The House originally proposed eight regions.
“Those suggestions fell on deaf ears and that’s unfortunate,” said Rep. Jim Waldman, a Democrat from Coconut Creek.

Democrats complained that the bill was negotiated in secret by a handful of people, giving House members little time to review the lengthy bills before Friday’s vote.

“I believe we should have had a conference committee. Something that has this much impact, for three or four people to sit down and come up with whatever is in this legislation is not the right process,” said Senate Democratic Leader Nan Rich of Weston.

The bills removed a requirement for plans to spend certain percentages on patient care and administrative costs. Federal health officials encouraged state lawmakers to include that provision in the bill.

Instead, the bills call for managed care plans to repay profits over 5 percent to the state. Schenck said other states, including Texas, follow that provision, which should pass muster with federal health officials.

Further improvements on the pilot effort include a yearly, independent audit. The state will also terminate that plan’s contracts in other areas if they pull out.

But Sen. Eleanor Sobel, a Hollywood Democrat, said the penalties aren’t strong enough. In her hometown in Broward County, Sobel said local leaders voted to pull out of the pilot after hearing from unhappy patients and doctors.

“My concern is based on what went wrong in the Medicaid pilot,” said Sobel. “We don’t even have the encounter data from the Medicaid pilot we just recently went through. We don’t know what kind of services people were getting. All we just know is we were charged a lot of money.”

Many doctors have dropped out of the program, complaining of red tape and that the insurers deny the tests and medicine they prescribe. In hopes of increasing doctor participation, the bill would increase their reimbursement rates and limit malpractice lawsuits for Medicaid patients.

“It builds upon a flawed experiment that gives tax dollars to HMOs to ration care to our most vulnerable residents,” said Laura Goodhue, head of patient advocacy group Florida CHAIN.

Negron said the state would slowly roll the program out over two years beginning in July 2012, allowing officials to address problems along the way.