'Reform' gets caution flag

By Jim Saunders
8/23/2010 © Health News Florida 

Federal health officials said last week they won't simply extend former Gov. Jeb Bush's Medicaid "reform" pilot program, as Florida requested. They're going to require some changes.

The federal Centers for Medicare and Medicaid Services said Florida's failure to expand reform statewide as originally planned will affect how it reviews a state request to keep operating the program. 

In an important legal distinction, CMS will not treat the request as an "extension," as the state had hoped, said Phil Williams, a top Florida Medicaid official. 

That opens the door to federal officials making changes in the program, which requires most Medicaid recipients in five counties to enroll in managed-care plans. Florida needs approval of what is known as a Medicaid "waiver" to continue operating the program past June 30, 2011. 

The program began in 2006, after federal officials approved a five-year waiver that called for gradually expanding reform throughout the state. The state Agency for Health Care Administration submitted a proposal June 30 for a three-year extension of the program, which currently operates in Broward, Duval, Nassau, Baker and Clay counties . 

In a letter last week to the state, CMS official Victoria Wachino said the decision not to treat the request as an extension would allow the federal agency to "modify the special terms and conditions of the demonstration (program) ... to address concerns.'' 

But Wachino also indicated the federal government was not trying to kill the program: "We look forward to working with the state in the coming months toward renewing the Florida Medicaid reform demonstration,'' she wrote. 

The letter does not specify what concerns CMS might have about the program. But at a minimum, it likely will increase uncertainty about the direction of the $20 billion Medicaid program, which is already expected to be a major issue during the 2011 legislative session. 

Williams, deputy secretary for Medicaid finance at the state Agency for Health Care Administration, said CMS would have been required to act on Florida's application within six months if it had treated the proposal as an extension. But the CMS review decision eliminates such a deadline, making it unclear whether questions will be resolved before the March 8 start of the annual legislative session. 

Along with potentially affecting tens of thousands of Medicaid beneficiaries, any changes could have high stakes for hospitals and other providers that receive $1 billion a year through the reform program to help care for low-income and uninsured patients. 

Lawmakers split up that money each year in what is known as the Low Income Pool. Williams made his comments last week during a meeting of the LIP Council, a panel that makes recommendations about the pool to the Legislature. 

Medicaid reform was a centerpiece of Bush's second term as governor, as he and other supporters argued that a shift to managed care would give more choices to beneficiaries and help hold down costs. But the program has always been controversial, with critics arguing that HMOs would scrimp on patient care to increase profits. 

Lawmakers spent the 2010 legislative session debating possible further expansions of Medicaid managed care, but the House and Senate could not reach agreement. Instead, they directed the Agency for Health Care Administration to seek an extension from the federal goverment of the Bush reform program. 

Incoming Senate President Mike Haridopolos, R-Merritt Island, and incoming House Speaker Dean Cannon, R-Winter Park, have already signaled they want to pursue far-reaching changes to Medicaid during the 2011 session. But at least some of those potential changes --- including a Senate idea to give insurance vouchers to Medicaid beneficiaries --- would require seeking a new federal waiver. 

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