Managed Medicaid

Fla. Lawmakers Opt Not to ExtendMedicaid Managed Care — for Now

Reprinted from the May 5, 2009, issue of MEDICARE ADVANTAGE NEWS, biweekly news and analysis on the Medicare (and Medicaid) managed care programs.

In the waning days of its session that ends May 8, Florida's state legislature opted not to extend the Medicaid managed care reform program's authorization — but it still has another year to do so. Lawmakers did delay until 2011 the onset of capitation for the Medicaid waiver program's Provider Service Networks (PSNs), which had been scheduled to start in 2009, the program's third year. PSNs now get paid under fee-for-service Medicaid.

Lawmakers also authorized Florida's Agency for Health Care Administration (AHCA) to seek a waiver amendment from CMS. This is intended to prevent Florida from losing significant federal dollars — roughly $300 million out of a total $1 billion — for hospitals from a "low-income pool" because the state failed to reach a performance benchmark requiring the Medicaid reform program, now in five counties, to go statewide by 2009.

In all, Florida's legislature ended up cutting about $6 billion to achieve roughly a $65 billion budget for the fiscal year starting July 1, Michael Garner, president and CEO of the Florida Association of Health Plans, Inc., told MAN May 5. Of this, Medicaid HMOs' funding remained almost constant at more than $2 billion, he says. While Medicaid HMOs have become the top expenditure for Florida's Medicaid program under the new budget, he adds, challenges remain.

"The bottom line is that everyone had had a very difficult legislative session in Florida. The magnitude of budget challenges facing the legislature has been monumental and unique," Garner says. "...While we were able to maintain our budget line with virtually no cuts, the cumulative effects of cuts from previous years still put the industry at a severe disadvantage, and we believe our [payment] rates are not adequate at this time."

Florida's pilot Medicaid managed-care waiver program now covers 200,000-plus enrollees, but it has come under fire in recent months for apparently worsening access to needed services and declining provider participation. WellCare Health Plans, Inc. soon will exit the pilot program because of what the company describes as "unsustainable" payment rates and, since WellCare is the biggest player in the program's two major counties, Broward and Duval, some observers foresee a potential coverage crisis. But the state continues to assert that the five remaining plans have the capacity to accommodate the roughly 80,000 current WellCare reform enrollees in Broward and Duval counties.

Initially, WellCare notified the state in February that it intended to leave Florida's Medicaid reform program May 1. But the Tampa-based company and state officials recently negotiated a deadline extension for some WellCare subsidiaries' Medicaid reform members.

AHCA spokeswoman Shelisha Durden on May 4 reiterated the state's confidence that there won't be coverage issues upon WellCare's departure from the Medicaid reform program. She said the agency is in the process of transitioning Medicaid beneficiaries enrolled in either WellCare's Health Ease or Staywell plans in Broward and Duval counties into new plans.

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