Managed Care: The Future Of Medicaid?

Jul 8, 2011

Tallahassee, FL – The entire Medicaid issue is still a "moving target" in Florida. Tom Flanigan reports the state's plan to move Medicaid patients into managed care could have a big impact, not only on the patients, but also the very industries that will have to work together closely under the proposal.

The Medicaid transition from the old "fee-for-service" model to the new "managed care" model has been in the works for quite awhile. It began as a five-county experiment back in 2006. Medicaid patients in those counties were moved into health maintenance organizations. State lawmakers gave the go-ahead this year to take the program statewide, pending approval from the federal government. Supporters of the legislation said managed care means better services at lower cost. But Tallahassee-based elder law attorney Twyla Sketchley says that may not be a given.

"There is a report ordered by the Florida Legislature in 2010 that is kind of the blueprint for the current Medicaid reform and that report clearly indicates that there is going to have to be a reduction in those people covered and the services provided," she said.

A number of other independent reports have also given managed care Medicaid mixed reviews. Under this year's legislation, the first Medicaid patients that would be transitioned into managed care would be the elderly and the developmentally disabled. That would include Medicaid patients in nursing homes and assisted living facilities. There are somewhere around 40,000 of those in Florida. Brian Lee advocated for nursing home residents as the Florida Department of Elder Affairs Long Term Care Ombudsman up until February of this year. That's when he was fired, some said, for stepping on too many toes in the nursing and retirement home industry. Today he heads Families for Better Care, which also represents those living in Florida nursing homes. He sees an inherent conflict between the health plan and nursing home industries when it comes to managed care Medicaid...especially if the health plans try to contain costs by moving patients out of nursing homes and into home or community-based care alternatives.

"In the nursing homes, if you're transitioning people out, occupancy rates go down for the nursing homes, it's going to impact their bottom line. And as far as the insurance companies, if we're allowing more options and we're transitioning to a managed care environment and we're providing more options for people to go outside of that managed care, then it's going to be an impact on the insurance companies."

But the Florida Association of Health Plans, which represents health maintenance organizations, doesn't see a downside for anyone. Michael Garner heads the association.

"It is more preferable that if individuals - seniors - want and need that level of care, have their outcomes in those settings and all at a lower cost so it is an absolute win for the individual and for the state as a whole."

And as far as the nursing home industry is concerned, Allison North-Jones doesn't see a big problem, either. She's spokesperson for the Florida Assisted Living Association.

"There's about 3,000 assisted living facilities throughout the state. And of those 3,000, 80 percent are private pay facilities. Which means they don't do anything with the state in terms of reimbursement with Medicare, Medicaid or HMOs."

Despite the relatively modest number of Medicaid patients in those facilities, North-Jones insists they'll receive better care at lower cost through managed care than they would under the old fee-for-service arrangement. And there are those who say the managed care solution may be the only hope for the future of Medicaid. One of them is former Republican Congressman from Louisiana Billy Tauzin.

"State across the country are looking at doing exactly what Florida's doing, because obviously managed care, coordination of care, are the ways in which you're going to settle the rising cost of health care in our country."

Still, as we heard at the outset from elder advocates Twyla Sketchley and Brian Lee, there are lingering concerns. Ron Pollack of Families USA, a national consumer group focused on health care, says Florida's managed care Medicaid game plan looks okay. The final outcome, he says, will depend on execution.

"The question is, is the motivation and the way it's being organized being done in such a way that's designed to improve quality of care or is it being done in a way to deny essential care?" Pollock said. "That's going to be the key factor that's going to determine whether this is a step forward or a step backward."

If the federal government gives Florida's Medicaid plan the green light, the answer to Pollack's question is still more than a year off. That's when the statewide transition will really get underway.