So it may seem like this already happened but today CMS issued the final documents approving Florida’s request to move almost its entire Medicaid program into managed care.  The state needed demonstration waiver approval for some (e.g. children on SSI, in foster care, dual-eligibles, etc) but not all of the populations it is seeking to move into managed care. Separate legal authority to move long-term care services into managed care has already been granted.

While 46% of Florida’s Medicaid beneficiaries are already in managed care, the deal reached between the state and the federal government is significant for its breadth and depth. The comprehensive approach Florida is taking by moving its entire program, including long-term care, into managed care is a concern to many because of the less than stellar history of managed care in Florida. (Just this week, former executives of WellCare, one of the largest companies operating in Florida’s Medicaid market, were convicted of fraud.)

With this increased flexibility comes greater oversight responsibilities for the state and federal governments to ensure consumer’s needs are met and taxpayer dollars are used wisely by the managed care plans.  The agreement is subject to another round of approval from CMS before the state can go statewide – implementation will occur on a regional basis starting January 1, 2014. By Halloween (yes really) the state must submit an implementation schedule, which includes triggers that would prevent the state from proceeding, incorporates stakeholder feedback etc.  But the schedule nonetheless remains ambitious.

In response to widespread concerns, the federal government included some unprecedented consumer protections in the demonstration agreement. For example, plans operating in Florida’s market will be required to comply with a medical-loss ratio (MLR) of 85%. The MLR provision limits how much a health insurer or managed care plan spends  on administrative overhead and profits to shareholders in comparison to actual health care. While some states have included an MLR in their Medicaid programs this is the first time I have seen the federal government require one. The Affordable Care Act included a medical-loss-ratio for plans operating in the private insurance market, but did not include Medicaid plans.

As Say Ahh! readers know, my colleagues at Georgetown and I have been studying Florida’s Medicaid program for many years. In its initial incarnation the demonstration waiver included many controversial elements – such as giving managed care companies unprecedented flexibility in determining what benefits package beneficiaries would receive and placing an annual cap on benefits. Those elements of the waiver have been gone for a few years now – since the Obama Administration discontinued them when the five county pilots in 2009 were renewed on new terms. The waiver now largely focuses on how the system of care in Florida’s Medicaid program is organized and does not (with a few exceptions) affect benefits, cost-sharing, or limit eligibility.

I’ll blog again about some of the details as we continue to unpack them.

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