State health reform plans include Medicaid managed care

Some of Florida’s most vulnerable residents — the frail elderly and poor or disabled adults — will be ushered into a new era of healthcare over the next five months that will change the way they receive their taxpayer funded long-term care from Medicaid, the federal-state program for the poor and disabled.

These residents, about 90,000 statewide including an estimated 25,000 in Miami-Dade, Broward and Monroe counties, soon will have their living assistance services managed by a private insurance company as Florida health officials roll out an ambitious reform of Medicaid that began Thursday in the Orlando area with an estimated 9,300 eligible Medicaid recipients becoming the first to be enrolled in long-term managed care.

In Miami-Dade and Monroe counties, about 17,000 residents eligible for Medicaid long-term managed care will receive letters in the mail this week informing them of the change and giving them until Dec. 1 to choose one of seven available health plans or have one chosen for them by the state.

Many will be choosing a health plan for the first time as a result of Medicaid reform, which aims to eventually move all of Florida’s estimated 3 million Medicaid recipients into privately-managed health plans with the goal of lowering costs while maintaining or improving the quality of care.

It’s a gigantic experiment, with enormous stakes.

“We don’t know whether or not it can be done any less expensively than it’s being done,’’ said Linda Quick, president of the South Florida Hospital and Healthcare Association, which represents a number of long-term care providers.

In 2011-2012, Florida’s Medicaid recipients cost $20.3 billion, with the federal government paying 56 percent or $11.3 billion and the state picking up 44 percent or about $9 billion.

Medicaid recipients in long-term managed care, including those in nursing homes and assisted living facilities, are among the costliest beneficiaries to care for at an estimated $3.5 billion a year. In 2011, Florida’s legislature made managed care mandatory for nearly all Medicaid patients.

Florida health officials are launching Medicaid reform with the long-term care population, the vast majority of whom are elderly and frail and receive daily living assistance. Disabled adults also participate in the program.

In fall 2014, state officials will begin a second phase of transition by moving the remaining portion of the Medicaid population into managed care plans.Under managed care, private health plans will receive a fixed amount per patient per month to manage a patient’s care. That means previously approved services may be re-assessed and possibly denied as medically unnecessary.

With the new plans, Medicaid recipients receive promises of more coordinated care, while the state hopes to lower its costs, and insurers reap potential profits for agreeing to manage services.

There are also risks that eligible Medicaid recipients will not receive appropriate care or counseling to help them choose a health plan, that the state will not realize savings, and that managed care companies will be motivated to deny needed care in order to make a profit.

But Florida is not going into the change blindly.

About 1.9 million of Florida’s Medicaid recipients already are enrolled in managed-care plans through a pilot program launched in 2006 in five counties, including Broward.

That experiment got off to a rocky start. Some insurers dropped out because they couldn’t earn profits. Medicaid beneficiaries complained of denied medical services, and physicians were unhappy about delayed payments and red tape. There was also minimal data on quality of care.

Still, a University of Florida review paid for by the state showed the pilot managed-care program saved taxpayer money, better coordination of care and access to specialists.

Since then, federal officials who approved Florida’s changes to Medicaid long-term and medical care instituted distinct consumer protections for the two managed-care programs.

Included in Florida’s contract with federal regulators who approved the change is a requirement that health plans spend at least 85 percent of premiums on healthcare, and only 15 percent on administrative costs and profits.

That’s not the case for the long-term care population, though Florida has agreed to report performance information to the federal Centers for Medicare and Medicaid Services on a quarterly basis during the first two years of the managed care program.

Monitoring will be done by the state’s Department of Elder Affairs, and each Medicaid long-term managed care recipient will be assigned a case manager if they don’t already have one, said Beth Kidder, assistant deputy secretary for Medicaid operations for the Agency for Health Care Administration, which manages the state’s program.

Though case managers will be employed by the health plans, Kidder said they will look out for the best interests of Medicaid recipients.

“That case manager is their advocate, their go-between, the one who makes sure they’re getting their services and are satisfied with their services,’’ Kidder said.

One of the primary goals of the long-term managed care program is to transition Medicaid recipients out of nursing homes, where the cost of care balloons because of round-the-clock medical staffing, room and board.

But if a Medicaid patient wants to leave a nursing facility and can receive adequate living assistance at home or in a community-based setting, the program saves money.

“Most people want to be at home, or a home-like setting,’’ Kidder said.

One concern with transitioning Medicaid long-term care recipients into managed care plans is whether people will choose a health plan that’s right for them — even though the state will notify them by mail, provide a toll-free telephone number and a website for guidance, and arrange face-to-face meetings with counselors.

Laura Summer, a researcher at the Health Policy Institute at Georgetown University, co-authored a study examining Florida’s plan.

Although the state’s program is premised on Medicaid recipients having a choice of health plans, she said, “To what extent are these folks aware of what’s happening?’’

Many in the long-term care population are able to make health plan choices. “But there’s a significant proportion of those people who really won’t necessarily get the mail that’s sent to them, won necessarily open it or read it or understand it,’’ Summer said.

In the Orlando area, the first to make the change, 49 percent of the estimated 9,300 eligible Medicaid recipients selected their own health plan from four choices. Another 14 percent had previously chosen to remain in a nursing home plan. The remaining 37 percent were assigned by the state to one of the plans in the region.

There’s also a question about whether providers will choose to remain in health plan networks at Medicaid rates, which typically are lower than the cost of services.

With a private health plan now administering those dollars, some hospitals and other healthcare providers worry that they will receive even less.

But Cliff Bauer, senior vice president of operations for Miami Jewish Health Systems, said his group has contracted with several local plans and does not expect to receive less.

“We will be paid the same amount by the managed care company that Medicaid paid us prior to the managed care company coming over,’’ he said.

Miami Jewish operates a 462-bed nursing home, and also provides living assistance such as personal care assistance, adult day care, meal delivery and other services to 2,400 people in Miami-Dade and Broward.

About 300 of the nursing home residents receive Medicaid, Bauer said, and no one will be forced to leave.

“It is very clear to me that the state has no intention of forcing anybody out of a nursing home,’’ he said.

Not everyone is convinced, though.

“It’s too early to tell,’’ said Summer, the Georgetown researcher. “There are two motives that people talk about much of the time for the diversion from nursing facilities to the community. One is people really choose that. They really want to live independently. They really believe the quality of their life is going to be better. The other is the financial. It definitely costs less to serve people in the community.’’