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Medicaid Experiment Wins Okay
By,
Steve Bousquet, St. Petersburg Times
October 20, 2005
Florida won fast federal approval Wednesday to control costs in its massive Medicaid program for the poor and elderly by capping benefits for some patients.
Under a pilot program set to begin in Duval and Broward counties next summer, tens of thousands of Medicaid recipients, many of them children, would be shifted to newly formed doctor networks or managed care plans.
The state's goal is to overhaul the traditional fee-for-service system to one that operates more like the private, profit-based insurance market.
Instead of reimbursing doctors or hospitals for treating Medicaid patients, the state will pay a fixed amount for each patient's care to networks of doctors or HMOs.
For the state of Florida, it's an effort to control a program that cost $15-billion last year. For patients, it may mean different doctors, fewer doctor visits and fewer choices of medicines.
Gov. Jeb Bush and U.S. Health and Human Services Secretary Mike Leavitt announced approval of a federal waiver, making Florida the largest state to carry out such an extensive Medicaid revamp and a prototype for other states grappling with skyrocketing Medicaid costs.
"I'm very confident that we will have a system that will focus on health rather than on sickness," Bush said. "We're changing the dynamics of the Medicaid marketplace."
Leavitt, a former governor of Utah and an appointee of the governor's brother, President Bush, approved the waiver in less than three weeks.
The next step is for the Legislature to meet in a special session in December to pass a law implementing the changes by next summer in two test counties.
"I'm not sure what the rush is," said lobbyist Karen Woodall, an advocate for the National Organization for Women and groups that represent Medicaid patients.
"I believe there are still a number of unanticipated changes that should lead the Legislature to put the brakes on this."
Tony Carvalho, a lobbyist for Florida hospitals, said Florida's Medicaid overhaul has real cost-saving potential, but he said some patients will be forced to switch doctors.
"This is a pretty radical change, and any change has its risk to the patient," Carvalho said.
Medicaid has been growing at an annual rate of 13 percent in Florida, more than three times faster than the growth rate of education spending, and now consumes about a fourth of the entire state budget.
The first phase of the five-year Medicaid revamp will affect more than 200,000 patients in the Fort Lauderdale and Jacksonville areas. That's less than one-tenth of the state's Medicaid population of 2.2-million.
Some skeptics say Medicaid patients will be overwhelmed by the complex changes that are afoot.
"A lot of people are frightened and they don't know what to expect. People are familiar with what they are currently doing," said Rep. Eleanor Sobel, D-Hollywood, whose city is in one of the test counties. "There's a lot of resistance."
The state says that the outmoded fee-for-service-Medicaid model leaves it powerless to reduce waste and fraud and that too few children get preventive care, such as regular dental checkups, that can reduce the need for costlier medical bills later.
Under the new plan, doctors and patients would be given incentives to have patients take better care of themselves to lower the rate of chronic illnesses, such as diabetes and hypertension.
But cost savings may not occur soon, and spending is capped under the waiver.
Alan Levine, secretary of the state Agency for Health Care Administration - which runs the Medicaid program, said the changes can't cost more than what the state would have paid had it continued under the old system.
What Levine called "cost neutrality" is a condition of the federal approval.
The plan that won approval Wednesday requires approval by the state Legislature. Bush said he expects to call lawmakers into a special session, possibly the week of Dec. 5, to approve the waiver's terms.
State Medicaid officials have been discussing the Medicaid changes with individual lawmakers for months.
"The governor is to be congratulated for the hard work on this Medicaid waiver," Senate President Tom Lee said in a statement. "I will be conferring with my Senate colleagues and House Speaker Allan Bense on where we go from here."
Bense's spokesman, Towson Fraser, said Bense would direct legislators who shaped Medicaid legislation for the past two years to recommend what action is needed.
A major breakthrough in months of negotiations between the state and federal government came a few weeks ago on the issue of how much money hospitals will receive for treating uninsured patients. Federal officials agreed to increase the amount in the so-called low-income pool from $688-million to $1-billion for five years.
"Until I see the terms and conditions, I can't really make a comment other than the $1-billion is a big deal," said hospital lobbyist Carvalho.
Medicaid is a program jointly paid for by the state and federal governments that provides health insurance to the poor, elderly, children and people with developmental disabilities.
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