Florida Legislature Passes Medicaid Reform
Around the State
Florida's Medicaid program will likely undergo fundamental and historic changes in the coming years, as the state Legislature passed a comprehensive reform package Friday, the last day of the legislative session.
The bill shifts Medicaid recipients from the government-centered program that provides health care to low-income families by paying providers for services, and into managed-care companies that are contractually obligated to provide services and meet cost-reduction goals.
The bill is largely based on a five-year-old pilot program in Broward County and four other North Florida counties, but the statewide move to managed-care companies is unprecedented among the other states.
Lawmakers have long targeted the program for reforms -- funded at $22 billion in the 2011-2012 fiscal year budget, it currently takes up 30 percent of the overall budget. More than 50 percent of the funds come from the federal government.
Senate President Mike Haridopolos and others went on a tour of the state last summer seeking input from citizens on the issue, and the final product passed Friday seeks to provide for more individual freedom and responsibility in choosing health-care services while reducing costs.
"We have very strict controls in place, but I think we should look at Medicaid more in an entrepreneurial way rather than a top-down 'we are the government, this is the way you will do it,'" said Sen. Joe Negron, R-Stuart, who led the charge on Medicaid reform in the Senate.
There is an exception included in the bill for disabled patients, who will receive an "iBudget," or yearly stipend to use for health care.
The bill passed in a 28-11 vote in the Senate and 79-39 in the House along party lines, with Democrats objecting to the reliance on private companies to take care of Medicaid patients.
Negron has stated that the changes to Medicaid will save up to $1.3 billion in the first year, with greater savings in subsequent years. Senate Minority Leader Nan Rich, D-Weston, doubted the promised savings, since there were no definitive cost savings that have resulted from the Broward pilot project.
"This pilot has been in effect for almost five years and at this point we have almost no definitive answer as to its success. I have serious reservations about whether we can throw pretty much all the most vulnerable people -- with the exception of some disabled people -- into managed-care plans," Rich said.
The bill establishes 11 regions in which health management organizations (HMOs) and provider service networks (PSNs), which are comprised of some nonprofit hospitals, are able to provide care. The House originally called for 18 regions, with an earlier Senate version including just 10 regions.
“Our good friends in the Senate suggested many good changes. We have now agreed to 11 regions in the state of Florida," said Rep. Rob Schenck, R-Spring Hill, chairman of the House Health and Human Services Committee and sponsor of the House Medicaid reform bill.
Republicans maintained the reforms would not reduce the quality of care, but Democrats remain unconvinced.
“This bill will reduce the scope and amount and duration of care,” said Rep. Mark Pafford, D-West Palm Beach.
Negron held that the contractual protections and penalties for providers who violate their contracts will help to ensure compliance in the amount and quality of care as well as cost reduction. He admitted that under the pilot project, HMOs left Medicaid patients, but said that wouldn't happen in the statewide reforms.
"HMOs did sign people up and then they did leave, that's absolutely true, but we learned from that. We made sure they wouldn't have to go from plan to plan. If you leave a region against your contract then you're kicked out of every other region that you're in," Negron said.
The bill also caps non-economic liability damages for Medicaid recipients at $200,000 for individuals and $300,000 per incident.
With many of the provisions in the Affordable Care Act, or Obamacare, that will increase the number of eligible Medicaid recipients in Florida by 1.4 million or 1.7 million people, legislators thought it was essential to enact reforms this year. Haridopolos vowed at the beginning of the session to not "kick the can down the road."
Many of the provisions of the Medicaid reform package require a federal waiver to be implemented, but Negron has expressed confidence that the federal government will issue the necessary waivers.
"I don't think we should allow Washington to commandeer our budget and I think they will work with us because they have the same budget problems we do," Negron said during the floor debate Thursday.
Gov. Rick Scott is expected to sign the bill into law.