Overview of Senate and House Medicaid Reform Proposals
Senate
CS/CS/SB 1484
• Authorizes the Agency for Health Care Administration (AHCA) to apply for a waiver extension for the 1115 Medicaid reform waiver and to preserve the low income pool provisions.
• Expands reform to counties that have two or more managed care plans with the capacity to serve the designated populations. Further authorizes expansion to additional counties as plan capacity develops.
o Includes 19 Counties: Miami-Dade, Orange, Hillsborough, Pinellas, Brevard, Citrus, Hernando, Jefferson, Lake, Madison, Manatee, Osceola, Pasco, Polk, Seminole and Wakulla
o Gadsden, Liberty and Palm Beach counties qualify by having at least two managed care plans but the plans could absorb only a portion of Medicaid enrollees.
• Requires any entity which contracts with AHCA to post a surety bond.
• Makes various changes to the Choice Counseling component.
Budget Amendment
The amendment adds proviso language directing AHCA to prepare a separate federal Medicaid waiver to permit the state, through legislative enactment, to manage the Medicaid program within an annually specified appropriation. Additionally it would:
• Authorize the legislature to make changes to optional eligibility groups and services in order to prevent spending more in any fiscal year than is appropriated.
• Allow the state to revise the benefit structure and delivery system to allow Medicaid recipients to be integrated into the private insurance market through the use of state vouchers.
• Includes a provision to require Medicaid recipients with higher incomes to participate in program costs through coinsurance and deductibles.
House
PCB SPCSEP 10-03 Relating to Medicaid Managed Care
The bill creates a new part and numerous new sections of law in Chapter 409 that will be phased in over a 5-year period.
PCB SPCSEP 10-04 Relating to Medicaid
The bill makes date-specific, conforming changes to current law and authorizes some immediate changes in the Medicaid program.
• All Medicaid recipients will be enrolled in managed care, including the elderly and the developmentally disabled
• There will be a competitive selection process whereby a limited number of plans will be selected
• Plans will be selected on a regional basis. There will be 6 regions statewide.
• Managed care plans will be held accountable
o The agency will establish 5-year contracts with no renewals
o Plans will be required to meet network adequacy standards
o Plans will be required to maintain program integrity functions including specific activities that reduce fraud and abuse
o Penalties will be established for reducing enrollment or early withdrawal including reimbursement of costs of transition and a fine of up to 5% of the capitation.
• Immediate changes to begin transition of current Medicaid system
o The agency is directed to seek an extension and modification of the 1115 waiver.
o The reform pilot is expanded to Miami-Dade County, beginning July 1, 2010 with full implementation expected by June 30, 2011.
o All Medicaid recipients statewide will be permitted to use their Medicaid premium to purchase private insurance.
Potential Implications of Both Proposals:
Intergovernmental Transfers
• Many local governments provide tax revenue to the state in the form of intergovernmental transfers (IGTs) which are used to “buy back” rate reductions and ceiling limitations.
• Absent these IGTs, state Medicaid reimbursement covers approximately 56% of a hospital’s costs. The use of IGTs increases this percentage to over 90% of costs for some hospitals.
• There is a question as to whether local governments will be willing to contribute IGTs if these funds are not paid directly to a hospital, but rather are paid to a managed care plan which will then reimburse the hospital.
County Medicaid Contributions
• We are not clear as to whether there will or will not be an impact. The state is prohibited from increasing the county share of cost until June 2011, but the increase in HMO enrollees may have that effect.