KHI News Service

Plans to expand Florida Medicaid welcomed and feared

By Phil Galewitz | February 25, 2013

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Almost overnight, Florida has gone from being an ardent opponent of the federal health care law to a laboratory for an ambitious experiment under the law.

Florida Governor Rick Scott speaks to the media after he toured the manufacturing facility at Beckman Coulter, a biomedical laboratory instruments manufacturer, on January 10, 2013 in Miami, Florida.

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If state lawmakers back Gov. Rick Scott's plan to expand Medicaid, it will be an experiment with a determinedly free-market twist. Scott’s turnabout on the Medicaid expansion came a few hours after the federal government tentatively approved his application to fully privatize the federal-state program for the poor.

That development has put health providers and consumers in a quandary: Most are elated that more than 1 million Floridians are in line to gain health coverage starting next year and that hundreds of millions in federal dollars will flow into the state to cover their medical services. But they’re also concerned that that coverage will be delivered through managed care plans with a mixed record of providing quality care in Florida.

Consumer groups worry about whether the health plans will have enough providers, especially in rural areas, and whether they’ll approve services in a timely way.

Nursing home operators fear that for-profit insurers may try to move residents into lower-cost settings even when that may be unsafe.

And doctors and hospitals say they're concerned about getting paid on time and about having trouble getting services approved for their patients.

"Hospitals' experience with managed care varies plan to plan in the ability to get patients into the right level of care … and plans paying claims efficiently and in a timely manner," said Bruce Rueben, president of the Florida Hospital Association.

Scott is not the first Republican governor to support the Medicaid expansion, which the Supreme Court made optional for states when it upheld the health care law last June. The governors of Ohio, Arizona, Michigan, Nevada, North Dakota and New Mexico preceded him. But Scott's decision is arguably more significant due to his state’s size (19 million people), its large number of uninsured (4 million) — and his outspoken opposition (he refused to acknowledge the law until the Supreme Court upheld its constitutionality.)

Florida's past experiments with managed care

If the Republican-controlled Legislature approves his plan when it meets next month, Florida would also become one of the largest to require virtually all recipients of Medicaid to enroll in private managed care plans which can limit which health providers patients can see.

Other states that have put nearly all their Medicaid recipients in managed care include Arizona, Tennessee, Kentucky and Pennsylvania, according to Joe Moser, interim executive director of Medicaid Health Plans of America, a trade group. "It's a proven model and not a new concept," he said.

About two-thirds of states already use managed care companies as a part of their Medicaid programs. Florida has done so for nearly two decades, with more than a third of its 3 million Medicaid recipients in the private health plans. These HMO-style plans get paid a set amount of money by the state to provide coverage, and the enrollees generally get care only from doctors, hospitals and other providers who have contracts with the plans.

And in five counties, including those in Fort Lauderdale and Jacksonville, it has run a pilot program mandating most recipients be in managed care. Originally there were a number of problems, including patients having trouble getting access and patient confusion about the plans. In addition a number of plans dropped out because of fears about losing money.

A 2009 University of Florida study, however, showed the pilot, which did not include those needing long-term-care, helped save the state about $100 million a year without increasing consumer complaints. But the study could not determine whether the savings came from the plans providing less care or being more efficient.

Under the tentative deal approved last week by the administration, virtually all Medicaid recipients would have to enroll in such a plan, including more than 100,000 living in nursing homes and those receiving long-term-care services at home and in community-based settings.

"People have a right to be concerned about quality of managed care because it does not have a strong track record in Florida," said Joan Alker, co-executive director of the Georgetown University Center for Children and Families.

Another example that critics cite is Wellcare Health Plans, Florida's largest Medicaid plan, which last year agreed to pay more than $137.5 million to the federal government and nine states, including Florida, to settle accusations that it bilked government health programs and systematically dumped patients with expensive health needs. The Tampa-based company never lost its state Medicaid contracts.

But Republican lawmakers who control the legislature say they have addressed past shortcomings with better oversight of managed care companies, increased reimbursement for doctors and more stringent penalties, including fining plans up to $500,000 if they drop out.

Scott, a former hospital executive who ran hospital giant HCA, said paying managed care companies fixed fees helps the state budget by making costs more predictable and also can improve care because the state can hold companies accountable. Florida’s Medicaid program costs the state $21 billion a year.

The managed care industry says it can improve care and lower costs by making sure patients get preventive services and have care overseen by a primary care doctor.

"We will bring the benefits of coordinated care to all low-income Floridians and give them access to a primary care medical home, comprehensive care management, and disease management programs," Moser said.

Four companies dominate Florida's Medicaid managed care market — Wellcare, Wellpoint, Centene and UnitedHealthcare — which have 75 percent of enrolled recipients. All stand to gain thousands of new customers and millions in additional revenue.

Long-term care is a key challenge

One of the biggest challenges will be moving the elderly and disabled into managed care plans.

Robert Beck, a lobbyist who represents home and community-based long-term-care providers, said the state has few personnel to assist in the enrollment of the 40,000 people needing home and community-based services through Medicaid. He said the state promises to mail information to people getting long-term-care services, but he doubts most will even open the letter. If people don’t choose a plan the state will automatically choose one for them.

"Any 85-year-old woman with dementia does not do well applying for Medicaid," Beck said.

Kristen Knapp, spokeswoman for the Florida Health Care Association, which represents nursing homes, said there are also concerns that plans may try to move residents out of institutions even though they need to be there. About 60 percent of Florida’s 71,000 nursing home residents are on Medicaid.

"We think there is a very small fraction of people who potentially could be transitioned safely to an alternative setting," she said.

As a condition of its approval, the Obama administration is requiring an independent authority to monitor the transition and also to measure quality-of-care requirements, an agreement that critics of the managed care industry praised.

"We are happy the administration listened to us and put transparency and accountability in place for the managed care plans so care is adequately delivered and people can access the benefits," said Laura Goodhue, executive director of Florida CHAIN, a consumer advocacy group.

Dr. Aaron Elkin, a Hollywood, Fla., obstetrician/gynecologist, said he is thrilled the state will allow Medicaid to expand, but remains wary of the private health plans and "the hoops they make doctors and patients go through."

Elkin, past president of the Broward County Medical Association, said the health plans have improved, but they still need to pay doctors more to get broader participation.

"Our experience has been dismal," he said of providers, "but most patients don’t complain because they are getting free care."

KHI News Service coverage of Medicaid expansion

Medicaid Access Coalition launches online "ticker" showing foregone federal dollars (2/13/14)
→ KHI report: Nearly 182,000 Kansans in the ‘Eligibility Gap’ (1/11/14)
House speaker says Medicaid expansion is "up to the governor" (1/10/14)
KS Senate president says Medicaid expansion unlikely to gain approval this session (1/7/14)
Profiles of the coverage gap: Kathleen Christian (1/6/14)
Efforts continue to expand Medicaid in Kansas and Missouri (1/6/14)
Hospital association hires former Bush HHS secretary to help craft a plan Kansas Republicans might support (12/23/13)
Iowa wins approval to expand Medicaid by using federal funds to buy private insurance (12/11/13)
White House officials hold call to urge Medicaid expansion in Kansas (11/21/13)
Republican governor talks up plan to expand Medicaid — his way (10/28/13)
Challenger says Brownback owes voters a decision on Medicaid expansion (10/22/13)
Nearly 5.2M Americans fall in coverage gap in states not expanding Medicaid (10/16/13)
Sebelius: Feds flexible on how states expand Medicaid (9/22/13)
Sebelius says Kansas and Missouri are missing the boat on Medicaid expansion (9/20/13)
Medicaid expansion coalition finds strength in numbers (9/17/13)
Republican Gov. Corbett proposes expanding Pennsylvania Medicaid (9/16/13)
Kansas lawmakers urged to consider Medicaid expansion by Wesley CEO (8/29/13)
Estimating maneuver could help more people gain from Obamacare: How the poor might qualify for Affordable Care Act subsidies in states that don't expand Medicaid (8/12/13)
Report: States not expanding Medicaid stand to benefit most from doing so (7/18/13)
CMS won’t penalize hospitals in states slow to expand Medicaid (5/14/13)
Insurer Centene: We can do Arkansas-style Medicaid (5/14/13)
The Arkansas Medicaid Model: What you need to know about the 'private option' (5/2/13)
Nothing to be done about coverage gap in states not expanding Medicaid, feds say (4/29/13)
Brownback says he's listening to Medicaid expansion proponents, opponents (4/5/13)
Oregon shows costs of putting Medicaid enrollees in private coverage (3/29/13)
Governor urged to expand Medicaid eligibility (3/27/13)
Arkansas Medicaid expansion attracts other states' interest (3/26/13)
Senate president prefers options remain open on Medicaid expansion (3/25/13)
States urged to expand Medicaid with private insurance (3/22/13)
Senate budget amendment underscores opposition to Medicaid expansion (3/21/13)
Study: Kansas employers face millions a year in possible penalties without Medicaid expansion (3/15/13)
More than 30 Kansas groups pushing for Medicaid expansion (3/12/13)
Health insurers see big opportunities in health law’s Medicaid expansion (3/8/13)
Medicaid expansion supporters to step up lobbying efforts (3/7/13)
Budget committee hears resolution opposing Medicaid expansion (2/22/13)
Legislators focusing on Medicaid expansion cost estimates (2/19/13)
Kansas hospital group study predicts expanding Medicaid would generate 4,000 jobs (2/18/13)
Brownback officials release their cost projections for Medicaid expansion (2/8/13)
Medicaid expansion bill introduced (1/22/13)
Kansas hospitals worried about loss of dollars for charity care (1/14/13)
Brownback compiling own estimate of Medicaid expansion cost (12/20/12)
Group urges Brownback to expand Medicaid eligibility (11/9/12)
Debate begins on possible Kansas Medicaid expansion (10/25/12)
Amerigroup CEO says states ‘need’ to go along with Medicaid expansion (7/11/12)
Kansas hospitals ready to get on with federal health reform, spokesman says (7/2/12)
Kansas AG claims partial victory in health reform case (6/29/12)
High court upholds Affordable Care Act, but ruling puts limits on Medicaid expansion (6/28/12)

→ Kansas Hospital Association: An opportunity for the Kansas Medicaid program
→ Americans for Prosperity-Kansas: Well-intentioned policies do more harm than good
→ Health Reform Resource Project: The cost of not expanding Medicaid
→ Rep. Jim Ward: Medicaid expansion essential for healthier Kansas
→ Rep. David Crum: Reasons for opposing Medicaid expansion
→ National Academy for State Health Policy: Much ado about Arkansas: Medicaid in the insurance exchange

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