The state pays Medicaid health plans a monthly rate per member. Plans profit when they keep costs below that amount, ideally by keeping people healthy enough to avoid the priciest care, such as emergency room visits.
The financial benefit to the state seems clear: The law says the plans will get 5 percent less per patient than they now do. If the companies spend less on care than the state gives them, they keep the first 5 percent in extra revenue. The next 5 percent is split between the company and the state. Anything beyond 10 percent goes back to the state.
Handling refunds to the state got Tampa’s WellCare into trouble a few years ago when a whistleblower accused executives of manipulating records so the firm could keep extra savings on mental health treatments. WellCare paid huge fines, overhauled its management team and now the former executives are being tried in federal court.
Industry officials say there are well proven methods to provide quality care at lower cost.
Preventive care is key. Case managers make sure patients are showing up to their appointments and taking their medications, said Gary Crayton, a former director of Florida’s Medicaid program who now works as a consultant to health plans.
Particular attention goes to patients with chronic diseases that get costly if not controlled, such as diabetes and asthma.
The task isn’t easy, given that many patients don’t have a way to get to appointments, and lose benefits if they inch over the income eligibility limits.
“It’s a constant struggle, but we’ve got a long history,” said David Pollack, Florida plan president of Molina Health Care, one of the nation’s largest Medicaid managed care plans.
“We believe primary care clinics can really add quality to the system,” said Pollack, whose company opens its own clinics in areas where there aren’t enough doctors who accept Medicaid patients.
Centene, which operates as Sunshine State Health Plan in Florida, recently started paying its Medicaid enrollees each time they seek preventive services, such as $10 for an annual flu shot. The money goes into an account that recipients can use to pay for needs like utilities, transportation or child care.
The biggest share of Medicaid dollars goes to the elderly in nursing homes and the seriously ill. But the largest number of recipients are children and pregnant women. They tend to be pretty healthy and “actually not complicated to deal with,’’ said Thomas Carroll, a health care analyst with investment firm Stifel Nicolaus
He said most Medicaid HMOs do a good job with prenatal care. But in the pilot project, a Broward County physician told federal officials that pregnant women struggled to find an obstetrician in their network.
As for the sickest patients, Florida Medicaid director Justin Senior said the key is risk-adjusted rates, which pay plans higher rates in such cases. He said some HMOs have shown interest in offering specialty plans to people with HIV/AIDS.
“They’re going for the sick because they get paid for it,” he said.
What’s not known yet is if doctors and other providers will be as enthusiastic about the new world of Florida Medicaid.
Jay Millson, executive director of the Florida Academy of Family Physicians, said it wasn’t clear if doctors could make ends meet on what they’d be paid.
“You’ve got to keep the lights on,” he said.
On that score, Florida’s plan could get a boost from the very federal law many Republicans oppose, the Affordable Care Act. To encourage more doctors to participate, it temporarily raises Medicaid reimbursement rates to Medicare levels — an average 70 percent pay raise. The raise lasts only through 2014, but “it’s a big deal,” said Crayton, the consultant.
That’s not the only inducement available. Molina, for instance, has paid “enhanced reimbursements” to doctors who meet certain quality benchmarks, such as performing screenings for cervical cancer, Pollack said.
Though most Medicaid enrollees already in managed care are in HMOs, some are in non-profit systems owned by medical providers. They, too, are gearing up for growth.
The University of Florida’s Shands Jacksonville Medical Center owns First Coast Advantage, with about 73,000 members in the Medicaid pilot.
It inherited a number of patients whose for-profit plans dropped out of the pilot. Now it hopes to expand its reach as far south as Citrus County, said president Michael Lawton.
“We’ve taken on a lot of plans that have just left the market,” Lawton said. “We’re providers, we’re here to stay.”
Information from Kaiser Health News was used in this report.