Fla. House panel approves major Medicaid overhaul

By Jim Ash
Florida Capital Bureau Chief

A House panel voted overwhelmingly Monday to put Medicaid reform on steroids, approving a massive overhaul that over the next five years would force the state's 2.7 million patients into some form of a managed care.

The idea is to eventually do away with a fee-for-service model that has the state reimbursing doctors directly for treating the poor in the $18 billion program.

Critics complain that the current system does little to manage costs, invites fraud, and leaves too many patients in the lurch because few doctors are willing take patients on Medicaid and its low reimbursement rates.

Instead, under this proposal, the state would contract with managed-care providers to take on Medicaid patients. Under managed care, patients would get their care from physicians within a network. Referrals to specialists would go through the managed-care system.

"Medicaid, I think we all know, needs improvement," said Rep. Denise Grimsley, a Republican from Lake Placid and one of the key architects. "There is too little incentive for ongoing improvement. The state, under the current system, just pays the bills."

The first committee vote came with just 18 days to go in the regular session. It passed the House Select Policy Council on Strategic and Economic Planning 16-1.

Grimsley warned that if nothing is done, Medicaid costs, which now make up 28 percent of state spending, will balloon to $28 billion by 2014 and eat up 34 percent of the budget.

The House proposal would divide the state into six regions, each with between three and 10 managed-care plans, including HMOs and hospital doctor groups.

Hospitals would have to contract with Medicaid managed care providers in their area, a move that would force some doctors to treat Medicaid patients.

"It's no secret that the pediatricians of Florida are not enamored with efforts to expand Medicaid HMOs," said Dr. Louis St. Petery, a Tallahassee physician and the executive vice president of the Florida Pediatric Society. St. Petery's group has brought a class-action federal suit in South Florida that seeks higher Medicaid reimbursement rates from the state.

The Florida Medical Association is adamantly opposed.

"It's not going to solve the access problem," said FMA lobbyist and general counsel Jeffery Scott. "(The state) is going to take the same amount of money and give it to managed care plans. How are they going to raise physician reimbursement rates? I just can't figure it out."

The House plan would also include nursing homes and the developmentally disabled.

The Senate approach to Medicaid reform is more incremental. It would expand a 2005 pilot program that put Medicaid patients in managed care in Broward County and the Jacksonville area to 19 new counties. Some 375,000 patients, mostly in Miami-Dade, Orange, Seminole, Brevard, Lake, Pinellas and the Tampa area, would be shifted to managed care.

Sen. Durell Peaden, a Republican from Crestview who chairs a social services spending committee, sees some problems with the House plan, particularly for patients in rural areas.