House Bill on Medical Homes

"Medical home" passes early test

By Jim Saunders 3/16/2010 © Health News Florida

With lawmakers moving toward expanding Medicaid managed-care, a House panel today approved a bill designed to be an alternative -- creating physician-driven "medical homes'' across the state.

The bill, pushed by Rep. Ed Homan of Tampa, an orthopedic surgeon, has the backing of doctors and hospitals. But it drew objections from a managed-care industry group.

The measure would link medical homes to provider-service networks that, in some parts of the state, are administered by hospitals. But it also includes potentially controversial moves such as changing the way Medicaid patients are assigned if they don't choose health plans -- shifting more to provider-service networks instead of HMOs (health-maintenance organizations).

Medical homes involve doctors coordinating the care of patients, making sure they have access to specialists and preventive services. Supporters say it is a better approach than expanding requirements for Medicaid recipients to join HMOs.

"I personally think that this is the future of medicine,'' said St. Augustine neurosurgeon Miguel Machado, who represented the Florida Medical Association today before the House Health & Family Services Policy Council.

The council, which is chaired by Homan, a Republican, approved the bill.

Florida requires Medicaid recipients in five counties to enroll in managed care plans. A Senate budget proposal released last week would expand that requirement to an additional 19 counties, though it also calls for a pilot program for medical homes.

Homan acknowledged after the meeting that he thinks an expansion of mandatory managed care will be approved before the legislative session ends April 30 and that his medical-home bill likely will change. But he said he is trying to get basic parts of the medical-home system approved.

Under the bill, provider-service networks or "medical home networks'' --- groups of primary-care doctors and other medical professionals --- would serve as administrative structures for the program. As an example, Homan said he thinks physicians in Hillsborough and Pinellas counties could join together in a network.

Physicians would receive additional money if medical homes lead to cost savings, which supporters say can happen if better primary care keeps patients out of emergency rooms and hospital beds. Doctors have long complained about low Medicaid payment rates, and the possibility of additional money could be an incentive for them to participate in medical homes.

Michael Garner, president of the Florida Association of Health Plans, said his group supports the concept of medical homes -- but he sees medical homes as including HMOs.

Garner objected to parts of the bill, including a potential change in the way Medicaid recipients are assigned if they don't choose a health plan. In much of the state, beneficiaries currently can choose between HMOs or MediPass, a fee-for-service program.

If beneficiaries do not make a choice, the state assigns them to plans until enrollment is 35 percent in MediPass and 65 percent in managed care. Under Homan's bill, however, that would largely flip: beneficiaries would be assigned until enrollment is 65 percent in provider-service networks designated as medical homes and 35 percent in HMOs or other types of managed-care plans.

Supporters say such a change is needed to give provider-service networks enough Medicaid recipients to make the program financially viable. But it also likely would siphon away enrollees from HMOs.

The debate comes as lawmakers grapple with an overall budget shortfall of as much as $3 billion for the fiscal year that starts July 1. With Medicaid costs expected to top $19 billion next year, lawmakers are looking for ways to limit the increases in the programs.

Expanding mandatory managed care to 19 counties would save $28.6 million next year, according to Senate budget documents released Monday. But the managed-care industry argues that the state would realize larger long-term savings after the new requirement is phased in.

Doctors and hospitals have objected to a greater Medicaid role for HMOs, with hospital-industry groups saying they want to create more provider-service networks to compete with managed-care companies.

--Capital Bureau Chief Jim Saunders can be reached at 850-228-0963 or by e-mail at jim.saunders@healthnewsflorida.org.