Medicaid Managed-Care Moves Ahead

Studies cite savings through competition, but hospital and medical associations are wary
By: Kenric Ward | Posted: April 13, 2010 12:48 AM

Two Medicaid reform bills cleared a key legislative hurdle Monday, and a new research study gave them another push forward.

Building on pilot programs already under way in five Florida counties, the new bills would expand managed-care initiatives to Miami-Dade County next year and implement a statewide program over five years.

"Reform has increased competition among health plans, reduced co-pays and expanded and diversified patient benefits," according to Michael Bond, a senior fellow at the James Madison Institute in Tallahassee.

Citing a 10.4 percent annual increase in expenses over the past 17 years, compared with 6.6 percent for medical inflation generally, Bond said the standard Medicaid "fee for service" system is "rife with quality issues including poor access and poor quality."

"Furthermore, Medicaid is routinely abused by both providers and beneficiaries. This ranges from Medicaid 'mills' to outright theft."

Rep. Denise Grimsley, R-Lake Placid, said reforms are urgently needed before Washington's new health-care program pours a million more Floridians into the Medicaid system.

"This legislation takes advantage of the managed-care model that will result in reduced costs and increased efficiency while maintaining quality of care," she said.

Under the proposed plan passed Monday by the Select Policy Council on Strategic & Economic Planning, the state would be divided into six regions, and each region will have a minimum of three to five plans and a maximum of seven to 10 plans, depending on the size of the region.

Providers wishing to participate will submit bids to the state and will be selected based on several factors such as price, accreditation, experience, access to providers, community partnerships, commitment to quality improvement, additional benefits and performance history.

The plans will be required to resubmit bids every five years to ensure the state is receiving the greatest value.

Florida’s Medicaid Managed Care Reform pilot is currently operating in five counties: Broward, Baker, Clay, Duval and Nassau.

A study of the reform pilot program by the University of Florida showed a reduction in the per member per month Medicaid costs by as much as $95 for those enrolled in a Provider Service Network and $26 per member per month reduction overall.

Proposed Committee Bill 10-04 would expand managed care immediately to Miami-Dade, the county with the state’s largest Medicaid population. PCB 10-03 would provide a five-year implementation period for moving the remainder of Medicaid participants into a capitated managed care system.

But HMO-based models face opposition from the Florida Hospital Association and the Florida Medical Association.

"It's not a realistic option. They know it won't work on a statewide basis," said Jeff Scott, general counsel of the FMA.

"This would just hammer physicians into involuntary servitude."

Bruce Rueben, president of the FHA, is similarly pessimistic about the state turning over authority to HMOs that may be "here today and gone tomorrow."

But Bond, a senior lecturer at the Eller College of Management at the University of Arizona, found positive results at the managed-care pilots.

"It is obvious that reform has increased the number of competing plans" in Broward and Duval counties, he said.

Additionally, Bond's study found that patients reported greater satisfaction with the new model.

"More than 80 percent of those surveyed reported it was not a problem to see their personal physician, and around 50 percent stated that it was easy to be seen by a specialist."

And do access and quality factors translate into savings? "The initial, cautious answer appears to be yes," Bond stated.

According to state data, extending the managed-care model to Miami-Dade County could save the state as much as $41.8 million in fiscal year 2011.

Contact Kenric Ward at or at (772) 801-5341.

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