Examiner
April 30, 2012
By Armand Colson
Medicaid is the largest health program in the United States in terms of number of recipients, serving approximately 56 million people. Enacted in 1964 under Title XIX of the Social Security Act, Medicaid provides medical services to low income and disabled persons.
Florida is considering legislation to move away from the traditional model in which the state pays doctors for each service they provide, to a model based in part on a five year old pilot program, whereby the overwhelming majority of the states’ Medicaid recipients would receive care and services from state authorized, for profit, health maintenance organizations (HMO’s).
In the past 11 years, the cost of Medicaid in Florida has risen from $9 billion to $21 billion. The proposed new system is intended to reduce that cost. Senator Joe Negron, co-sponsor of the legislation, has said, “There is consensus that the Medicaid system is irretrievably broken.”
Under the new system, the state would be divided into 11 regions with HMO plans competing for contracts in each region, and there would be no restriction for a particular plan to cover more than one region. The new system would give HMO’s the right to set limits on services and possibly deny some benefits; as such, the federal government must approval such a system.
Florida’s Agency for Health Care Administration (AHCA) is preparing to enter into a lengthy contracting process of securing bids for managing the new system. Some of the companies expressing interesting in bidding for contracts are: Humana, WellCare, Amerigroup, Brevard Alzheimer’s Foundation, Inc., Miami Jewish Health System, American Eldercare, and UnitedHealthcare.
The Jessie Ball DuPont Fund commissioned researchers from Georgetown University’s Health Policy Institute to examine the impact of changes to Florida’s Medicaid program. This study has raised questions about services and costs. The pilot program on which the new system is modeled appears to have been less than successful. Some of the issues were HMO’s left the program due to low reimbursement rates and doctors listed in the network stopped accepting Medicaid patients.
There are concerns HMO’s, through the ability to limit services and/or deny some benefits, will reduce available health care for the most vulnerable, i.e., the disabled, the elderly, and those with serious chronic illness.
Proponents argue a statewide managed care system would help hold down costs and better coordinate health coverage for Medicaid beneficiaries. Opponents argue the same system could make it more difficult for beneficiaries to receive needed care.
The impending decision by the U.S. Supreme Court regarding the Affordable Care Act will impact Medicaid on a federal and state level. The proposed legislation by Florida is being closely watched by other states. While many states use managed care, in some form, in handling Medicaid services, none have the potential of limiting services or the possibility of denial of some benefits. The fear of losing federal funds would seem to be a deterrent to limitation of services or denial of benefits.
If Florida’s proposed new system can rectify the concerns, receives federal authorization and is ultimately enacted, other states may consider following Florida’s lead.