More Losers Than Winners as HMOs Skim Off Florida’s $20 Billion Medicaid Overhaul

As the Florida House and Senate transform the $20 billion Medicaid system, they will create winners and losers.

One winner is easy to predict. The House and Senate both want to put almost all Medicaid beneficiaries into managed-care plans, giving HMOs a flood of new customers. [The overhaul does nothing to change the status of 3.8 million uninsured Floridians.]

But numerous other groups will have to wait for the outcome of House and Senate negotiations to find out how they fare. With those talks expected to accelerate after the Passover-Easter break, here are some groups that have a lot at stake:

Disabled people: The House and Senate agree that a mandatory managed-care system should include seniors so frail they qualify for long-term care and a vast majority of other Medicaid beneficiaries — such as low-income women and children.

But a critical difference is that the House’s Medicaid bill, which was approved March 31, also would include people with developmental disabilities, such as autism, cerebral palsy, spina bifida and mental retardation.

Developmental-disability groups have argued they should not be included in the managed-care system. The Senate bill, which is ready for a vote in the full Senate, takes that position. But the House envisions a Medicaid system that would integrate all types of beneficiaries.

Hospitals: Looking to compete with HMOs, hospitals want to form “provider-service networks,” a type of locally driven managed-care plan that aims to cut out the insurance middle man.

But hospitals say details of the bills could help determine whether the networks are successful. As an example, HMOs get paid a set amount of money each month to care for their members — what is known as a capitation rate.

Hospitals, however, want to allow provider-service networks to initially get paid based on medical claims, rather than having to rely on capitated payments. That would be more like Medicaid’s traditional fee-for-service system.

HMOs have argued that all types of managed-care plans should be treated the same.

The House bill would allow such fee-for-service payments for the first three years of a network’s operation, but the Senate bill would not.

Medically Needy: Senate leaders want to give the Medically Needy program a less-catchy, less-empathetic new name — the “Medicaid nonpoverty medical subsidy.”

A new name is only a symptom of the huge change the Senate wants to make in the program, which covers people who don’t normally qualify for Medicaid but who have extremely costly illnesses that are beyond their means. The Senate would continue providing physician services to people in the Medically Needy program, but would cut off funding for hospital and drug costs.

The House has adamantly opposed the cuts and is backed by the hospital industry. They argue that Medically Needy recipients will still need expensive treatment, which would force hospitals to provide more uncompensated care.

Trial lawyers and doctors: Across the Capitol this spring, trial lawyers are scrambling to fend off bills that would limit lawsuits against doctors, hospitals, nursing homes and other types of health providers.

The House and Senate Medicaid bills include such limits, but to far-different degrees. Both bills would place new limits on damages in malpractice cases against physicians who treat Medicaid patients.

Senators, however, would go further by shielding nursing homes and other groups, such as developmental-disability service providers, from costly lawsuits. It remains unclear whether lawmakers will include such liability issues in the ultimate Medicaid bill or deal with them in separate measures.

–Jim Saunders, Health news Florida