Florida Medicaid Changes Come Under Scrutiny in 2012

Dec 30 2011 - 3:44pm
Medicaid in Florida

In 2011 the Florida state legislature approved a statute authorizing the state to make significant changes to Florida’s Medicaid Reform program already in existence as a pilot. The changes impacted only the five counties engaged in the pilot since 2006. In 2012 Floridians could see additional, wide-ranging changes to their Medicaid health insurance program as the modified plan expands throughout the state and as the federal government intervenes.

Passed in May, the bill shifted Medicaid health insurance recipients from the government-centered effort that provides affordable health care to low-income families by paying providers for services to managed-care companies that are contractually obligated to provide services and meet cost-reduction goals, according to an article in the Sunshine State News. The article highlighted the motivation on the part of state leaders to reduce Medicaid costs that eat up nearly 30 percent of the state’s annual budget. Fifty percent of those funds come from the federal government.

In a detailed review of Florida’s changes, the Georgetown University Health Policy Institute said some program changes that the state is seeking require waiver authority from the federal government and others do not. Principle among the changes, the institute said, is a desire to move much of Florida’s acute and long-term care services into capitated managed care. Capitated managed care means a managed care company receives monthly payments to cover most or all of the services that a beneficiary receives rather than providers being paid on a fee-for-service basis.

To understand the federal government’s interest in Florida’s doings, the Georgetown paper pointed out “in the next three fiscal years, it is estimated that for every $1 Florida spends on Medicaid, the federal government will give the state 58-59 cents. Currently, annual costs for Florida Medicaid health insurance program are slightly less than $20.3 billion.” This “open-ended source” of funding coming from the federal government does have strings attached. When Florida embarks on a new approach or idea and uses federal matching funds, the state must request a waiver of existing federal Medicaid rules. Thus the state’s proposed changes in 2012 including the move of long-term care services to managed care will come under scrutiny of Medicaid officials in the very near future.

The Georgetown assessment goes on to suggest that the change from long-term care to private sector management care will not save the state money in the long run and the report describes why: “ Florida’s general fund revenues have declined 10.3 percent over the past five years while enrollment in the state’s Medicaid program has grown by approximately one million persons. Increases in Florida’s costs are very closely correlated to this increase in enrollment. The trends are important because, by contrast, cost growth in the private-sector health system is primarily due to cost of services going up – rather than more people being covered, as is the case in Florida’s Medicaid program. Florida’s Medicaid program is in fact more efficient than the private sector in containing costs – in large part due to low provider reimbursement rates.”

While the Georgetown Health Policy Institute report calls into the question the Florida state legislature’s actions and its impact on Medicaid beneficiaries, the Heritage Foundation praises the state for seeking solutions to a nationwide problem.



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