Beginning Tuesday, more than a half million South Floridians, mostly children and women, will begin receiving their government-subsidized healthcare through private insurers, part of an effort to move about 3.6 million Floridians on Medicaid to a managed care model that lawmakers believe will cut costs.
Broward, Miami-Dade and Monroe counties are the latest to transition their entire Medicaid populations to private insurers, though nearly 350,000 Medicaid recipients in the region — and 1.1 million across the state — have participated in experimental managed care programs since 2005.
Under Florida’s Managed Medical Assistance program, nearly all of Florida’s Medicaid recipients will be moved in phases to private insurers, mostly Health Maintenance Organizations or HMOs and Provider Service Networks or PSNs, which operate like HMOs except the majority of the company must be owned by doctors and hospitals.
For the managed care companies, there’s a lot at stake, namely the estimated $21.2 billion that Florida and the federal government will spend this year on the Medicaid program — more than a quarter of the state’s $77 billion budget.
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But the stakes also are high for Florida’s Medicaid recipients — mostly the poor — who consumer advocacy groups fear are being rushed into private insurance plans without enough time and information to choose wisely. The last regions, including Orlando and Palm Beach, will change over on Aug. 1 .
“It’s all coming out so fast. They’re rolling out the entire state in a four-month period,’’ said Greg Mellowe, policy director for the consumer advocacy group Florida CHAIN. “The question is … do recipients have the information to choose the plan that best suits their needs?’’
Medicaid beneficiaries in Miami-Dade and Monroe counties have 10 plans to choose from, while those in Broward can select from four different plans.
Justin Senior, Florida’s Medicaid director, said program recipients were informed 60 days prior to the change.
In Miami-Dade, Senior said, about 511,000 people are going to start participating in Medicaid managed care starting Tuesday. Roughly 210,000 or about 40 percent of them selected their own health plan, he said, and another 175,000 were automatically assigned to a plan in which they already participated.
The remaining 125,000 were assigned using an algorithm that matched them to a plan that included their primary physician — a method that Senior said has led to high customer satisfaction.
Though the low number of members making their own plan selection in Miami-Dade suggests a lack of engagement, Senior called that “an unfair characterization.’’
“You’re talking about people who did look into it, did shop, did find out about other plans,’’ he said.
“And they realized the agency algorithm was right, and they’re in a plan they would have chosen.’’
But a 40 percent selection rate “is not a good number,’’ said Joan Alker, executive director of the Center for Children and Families at Georgetown University, which has studied the Florida Medicaid program for more than a decade.
“I would be very concerned about that … if it’s the minority of folks who have actually chosen their plan. That suggests to me that consumers may not be very aware of what’s going on,’’ Alker said.
Senior said Florida’s Agency for Health Care Administration, which manages the Medicaid program, has learned a lot experimenting with the selection process for the 1.1 million Floridians already in managed care.
That’s how the state came up with the algorithm to match recipients to the plan most likely to include their primary physician, Senior said, and that’s why all Medicaid recipients will have 90 days after enrollment to change their plan.
However, consumer advocacy groups are not the only ones concerned about Florida’s transition to Medicaid managed care.
Physicians also are worried that private insurers will not pay enough to include a sufficient number of doctors and hospitals in their provider networks, said Aaron Elkin, a Hollywood obstetrician and board chairman of the Broward Medical Association.
“There are very few doctors who are willing to participate in Medicaid HMOs or PSNs due to the extremely low reimbursement rate,’’ he said.
Elkin added that he also expects managed care companies to reduce access to physicians and hospitals through denial of care and time-consuming referrals.
“It’s managing the claim,’’ he said of private insurers. “Not managing the care.
“Ultimately what’s happening is we see the patients, and then you don’t get paid for it,’’ Elkin said. “Your staff can’t spend three hours to try to get a referral for the Medicaid reimbursement of $15, $20 or $30. You can’t get the staff to do that.’’
Elkin, who has been a critic of the state’s managed care pilot program that launched in Broward and Duval counties in 2005, said he believes the solution for getting more physicians and hospitals to participate in Medicaid managed care plans is for Florida to accept the federal government’s offer to pay the state nearly $50 billion over 10 years to expand eligibility for the program — a proposal rejected by the state Legislature.
“The state of Florida needs to accept the federal money so the managed care companies can populate their networks and support access to care,’’ he said.
Under the program rolled out Tuesday, physicians who participate in a Medicaid managed care plan for two consecutive years are supposed to get a raise to Medicare rates, said Senior, the state Medicaid director.
Florida’s Medicaid managed care program also uses a Medicare template to ensure network adequacy, requiring insurers to update the state each week on their providers and mandating that most of them accept new patients.
“Now, 95 percent of your doctors have to be accepting new patients,’’ Senior said. “ Insurers that fail to keep adequate provider networks will face penalties, sanctions and potential termination of contracts.
Rosy Cozad, chief executive of Amerigroup Florida, one of the 10 managed care companies serving Miami-Dade and among the largest in the state, said in a written statement that the insurer has spent a decade building its provider network in the region.
“We are currently five times over the network adequacy minimum required by the state in this region,’’ Cozad said in the statement. “We generally pay Medicaid rates or higher for physician services, and we offer incentive programs that also allow physicians to achieve higher reimbursement when they excel or improve in quality.’’
Another consumer protection in Florida’s managed care model is program stabilization, which requires insurers to make a five-year commitment to every region of the state they serve, Senior said.
If an insurer pulls out of one region, the company loses its contract for the entire state.
Private insurers also will be required to abide by the so-called Medical Loss Ratio, which requires companies to spend 85 percent of every dollar in premiums on healthcare and keep only 15 percent for profit and overhead.
Any amount less than the 85 percent that is spent on healthcare will be refunded to the state.
Despite Florida’s Medicaid program including what Alker of Georgetown University called “the most far-reaching” consumer protections she has seen for a federal-state agreement, she said independent oversight will be needed to ensure that private companies do not reduce access to care.
Medicaid managed care will work on a capitation basis, meaning the state pays private insurers a set fee per member per month. The fee depends on the member’s age and other factors, but whatever the private insurer doesn’t spend on healthcare will count as profit.
So managed care companies will only reduce program costs by providing more efficient care.
“The problem is there’s actually very little waste in Medicaid,’’ Alker said.