CMS Asks Florida ‘Where’s the Beef’? (Do States Need a Waiver to do Managed Care?)

Last week the Centers for Medicare and Medicaid Services sent a letter to the Florida Agency for Health Care Administration in response to the state’s request for waiver authority to expand managed care statewide.  CMS responded by saying that their Medicaid waiver extension request cannot be granted because it lacks a specific plan. The state’s current Medicaid waiver expires June 30th, 2011 – the managed care component has been operating in five pilot counties for the past five years.

Reports that I co-authored with my colleague Jack Hoadley have highlighted many problems in the pilot counties where the waiver has been in operation including doctors leaving the program and beneficiaries having difficulty accessing needed services. Most recently, we found that two-thirds of plan enrollment has turned over in the last three years due to the instability of the managed care market in Florida.  The largest managed care company in the first round of enrollment – Wellcare – kicked off the new “reform” by committing eye-popping instances of fraud.

The interesting part of all of this is that states don’t even NEED a waiver to do managed care for many Medicaid beneficiaries – including adults with disabilities and families with children- as long as certain consumer protections are observed. Children who are eligible for Medicaid because of their incomes can be required to enroll in managed care – only those who are receiving Supplemental Security Income (SSI) or in foster care, dual eligibles and Native Americans require waiver authority to be enrolled mandatorily in managed care.

Among other things, Florida’s expiring Medicaid waiver permits a special form of managed care that allows plans to limit certain benefits for adults, and in some limited circumstances for children. In fact the General Counsel of the GAO has said that the Bush Administration exceeded its legal authority in granting the original waiver. The public debate has made little mention of limiting benefits. If there were no benefit limits no waiver would be needed for the majority of Medicaid beneficiaries to go into managed care. Florida could go statewide for the same groups it currently enrolls, but the legislature has a far-reaching agenda to move everyone – including those in nursing homes – into managed care plans, and more. No other state, except Arizona, has gone this far.

Apparently a deal was reached yesterday in Florida’s legislature on a final bill, and details are slowly emerging. No doubt there will be aspects of the plan that go beyond a simple expansion of managed care.  CMS has rightly stated that they are not opposed to managed care going statewide, but that the state needs to address the concerns that have been documented about access to care and other issues. And more rigorous oversight of managed care in Florida is needed to ensure that public dollars are used responsibly to promote better quality care rather than saving money by limiting access to benefits and services that families, seniors and people with disabilities need.

We’ll be keeping an eye on the Florida situation and keep you posted.

Joan Alker
Joan Alker is the Executive Director of the Center for Children and Families