The pilot program, launched in 2005, was an attempt by then-Gov. Jeb Bush and the Legislature to rein in Medicaid spending by moving most Medicaid recipients into HMOs. As UF’s Duncan summarized in his 2011 report, the goal was to “emulate comparable successes in the private sector,” stop the cost increases and empower consumers to make choices.

Justin Senior, Florida’s Medicaid director, says the reform is often incorrectly seen as a test of managed care. In fact, a million Medicaid recipients throughout the state are already voluntarily in HMOs. But the pilot program would allow the HMOs to vary their offerings to compete for customers and give consumers bonuses for healthy behavior.

To control costs, the state wanted capitated programs, meaning an HMO would get a set fee for each patient and then assume the risk of providing care for less than that sum. To make that fair, the state offered to pay the HMOs on a “risk-adjusted” basis — meaning HMOs would get more if a patient was seriously ill.

Rocky start

The pilot began in Broward and Duval counties in 2006, expanding the following year into three rural counties near Jacksonville. Even major supporters say the beginning was chaotic.

“When reform first started, it was a disaster,” says Marcio Cabrera, chief executive of Simply Healthcare, which operates Medicaid HMOs. “The reality is they were underfunding the program.”

That meant managed care companies, at first enthusiastic, began to drop out. So did doctors. Patients complained.

Despite the Legislature’s theory of HMOs offering broadly different benefits, there wasn’t much difference in their plans, says Cabrera, “because there wasn’t a whole lot of money to go around.”

Some major providers remained on the sidelines, including Cleveland Clinic Florida, a hospital-physician system highly ranked in many national surveys.

One of the victims of the turmoil was Leslie Rosenstock of Fort Lauderdale, who handles the care of son Jason, 35, brain-injured as a child. Because of HMOs coming and going, Jason bounced among three plans. His medications tended to be expensive. His mother often had to battle to have them approved. She also struggled to find doctors.

“When we found doctors, we got a lot of denials, even for medications he’s been taking since the age of 4,” Rosenstock says. “There was a lot of paperwork, a lot of bureaucracy.”

Each time her son was put in a new plan, she had to renew the struggle for doctors and approvals, sometimes having to badger HMO employees and seek help from politicians and distant bureaucrats. She has a master’s degree in social work, but the problems were so complex, “this kind of brought me to my knees.”

NETWORKS SURGE

As HMOs left, many beneficiaries turned to PSNs. Many were nonprofits. Some were for-profit. They managed care similarly to HMOs — with one striking difference. All of them used the old fee-for-service model that Florida has been trying to move away from.

One of the earliest and largest is South Florida Community Care Network, which includes the hospitals and clinics of Broward’s public hospitals: Memorial Healthcare System and Broward Health.

Today, almost half of all enrollees in the reforms — 48 percent — are now with PSNs. A study by the Florida Center for Fiscal and Economic Policy concluded in December that PSNs “generally provided better access to care than their HMO counterparts.”