A federal judge Wednesday declared Florida’s healthcare system for needy and disabled children to be in violation of several federal laws, handing a stunning victory to doctors and children’s advocates who have fought for almost a decade to force the state to pay pediatricians enough money to ensure impoverished children can receive adequate care.
In his 153-page ruling, U.S. Circuit Judge Adalberto Jordan said lawmakers had for years set the state’s Medicaid budget at an artificially low level, causing pediatricians and other specialists for children to opt out of the insurance program for the needy. In some areas of the state, parents had to travel long distances to see specialists.
The low spending plans, which forced Medicaid providers for needy children to be paid far below what private insurers would spend — and well below what doctors were paid in the Medicare program for a more powerful group, elders — amounted to rationing of care, the order said.
“This is a great day for the children in this state,” said Dr. Louis B. St. Petery, a Tallahassee pediatrician who is executive vice president of the Florida Pediatric Society and helped spearhead the suit. “This action was taken because we found that children weren’t being treated properly if they were on Medicaid. Our position as pediatricians,” he added, “is that children do not choose their parents. They don’t have a choice to be born into a rich family or a poor family.”
“We feel all children are of equal value,” St. Petery added.
The three state agencies named in the suit authored a short statement Wednesday afternoon: “The Judge’s outdated observations pertain to a Medicaid program that no longer exists. Florida’s new Statewide Medicaid Managed Care (SMMC) program is cost-effective and a working success.” The statement was issued by the Agency for Health Care Administration, or AHCA.
The low billing rates, Jordan wrote, exacerbate a long-standing problem: There is a shortage of pediatricians overall. “The shortage gives pediatricians the ability to treat higher paying patients and either not treat, or limit, the number of Medicaid patients they do treat,” Jordan wrote. “The shortage of pediatricians in rural areas is especially acute.”
Enrollment in the Medicaid program increased from 1.2 million in 2005 to 1.7 million in 2011 — though the number of primary care doctors for children apparently has not risen at all, he added.
Among Jordan’s findings:
▪ Almost 80 percent of children enrolled in the Medicaid program “are getting no dental services at all.”
▪ By squeezing doctor payments, Florida health regulators left one-third of the state’s children on Medicaid with no preventative medical care, despite federal legal requirements — and this was true for both children paying fee-for-service or under managed care. “In addition,” Jordan wrote, “an unacceptable percentage of infants do not receive a single well-child visit in the first 18 months of their lives.”
▪ Florida health regulators sometimes switched needy children from one Medicaid provider to another “without their parents’ knowledge or consent.”
▪ The number of needy Florida children able to get a potentially life-saving blood screening for lead is “extremely low, notwithstanding the fact that part of Florida has an aging housing stock, which means children are more likely exposed to lead-based paint.”
▪ Thousands of children are “terminated” — or kicked out of — the Medicaid program each year, sometimes due to nothing more than bureaucratic error. For every budget year from 2003 to 2007, at least 25,000 youngsters below age 5 were removed from the Medicaid rolls before they had received a year of insurance. One study found that close to 30 percent of terminations or coverage denials for both children and adults “were erroneous.”
▪ The scarcity of doctors who accept Medicaid insurance in some parts of the state means “children on Medicaid have to travel to other areas of the state and/or wait for several months to obtain care.”
Some specialists received a rate increase of 24 percent for treating children on Medicaid in 2004, Jordan wrote, but that was the only fee adjustment in a decade, and it still left such specialists with reimbursements substantially below the rates for equivalent care under Medicare, the program for seniors.
A doctor in Tallahassee, for example, testified that Medicaid would pay about $85 for a visit to his ear, nose and throat practice, though the average cost for such a visit was $138. Several doctors testified that they lost money when they treated patients on Medicaid.
Although he called Wednesday’s ruling a clear victory for needy children, lawyer Stuart Singer, who litigated the case, said the extent of the victory will hinge largely on whether the Legislature and Gov. Rick Scott will set aside enough new dollars to improve medical and dental care for needy kids. Because the federal government will match each dollar the state spends, Florida would need to appropriate about $200 million to fix the Medicaid program, Singer said.
“I’m hopeful and optimistic that this is a wake-up call,” Singer said. “When a respected jurist renders a decision like this, showing sweeping violations of the Medicaid Act by Florida, one would hope that responsible legislators will take notice.”
The dispute began in 2005, when a group of pediatricians, dentists and nine children sued three state agencies, claiming reimbursement rates for pediatric, dental and specialty care for children were so low that they drove most doctors away from treating children insured by Medicaid — in violation of federal law. The three state agencies are AHCA, the Department of Children & Families and the Department of Health.
The lawsuit dragged on so long that the presiding judge, Jordan, was elevated to the Eleventh U.S. Circuit Court of Appeals in May 2011, though he opted to retain jurisdiction over the case. After the Affordable Care Act was passed by Congress, granting the state millions of dollars from a total pot of about $11 billion to improve reimbursement rates for doctors, lawyers for the state agencies argued the lawsuit had become moot, though the federal subsidies were set to expire Wednesday, meaning reimbursement rates will almost certainly decline dramatically again.
One named plaintiff in the case, Thomas Gorenflo, died, at age 12, of multiple organ failure on Aug. 14, 2011, before Jordan was able to rule. Jordan wrote that “unreasonable delay in the provision of health services” left Thomas’ brother, Nathaniel, at “significant risk” while the suit progressed.
In his order, Jordan said he would set a hearing for later this month to determine where to proceed with a remedy.
The judge’s order is not unprecedented. Florida long has been at or near the bottom of the 50 states for spending on children, disabled people, and people with mental illness.
In 1996, U.S. District Judge Wilkie Ferguson of Fort Lauderdale, now deceased, ruled the state was violating the U.S. Constitution by requiring severely disabled people to wait years for necessary care and services. When his ruling went ignored for three years, Ferguson declared the state in contempt, and began fining it $10,000 each day the order was defied.
The fines later were overturned. But by 2001, lawmakers, wary that Ferguson was on the verge of taking over the state’s disability program, increased funding for disability services by about $300 million, removing about 25,000 Floridians from a wait list where they had languished for years. The wait list has since returned to the levels seen in the 1990s.
Two years ago, another federal judge, U.S. District Judge Joan Lenard of Miami, ruled that AHCA had left autistic children from impoverished families at risk of “irreversible” harm by refusing to pay for a critical therapy that can help them lead more normal lives.
The therapy, called “applied behavior analysis,” had long been accepted by mainstream medicine as a way to improve the language, behavioral and social skills of children with autism, though AHCA had declared it an “experimental” treatment. Lenard called that claim “outrageous” in a March 2012 order.