Medicaid Money Woes Renew Look At Alternative Cost Options, Ambulatory Care

Aug 15, 2015

Florida’s Medicaid costs will go up next year. Enrollment in the program that insurers low-income Floridians continues to grow even without a legislative move to expanding it to people who qualify under the Affordable Care Act. Now  lawmakers are feeling the pressure to put cost controls in place.

Florida healthcare officers say hospitals could be a major factor causing the state’s Medicaid Managed Care program to run $500 million in the red. Insurers taking part in the privatized program are asking for double the rate increase the state has proposed, plus a nearly $400 million cash infusion. The state says the cause of the money woes is in hospital contracts with the insurers.

“If they’re contracting for rates…higher than they bid, then we have some problems with what are they spending and why are they spending more than they legally ought to be," Agency for Healthcare Administration Secretary, Liz Dudek told reporters. "We want to help them, we want to be successful, but we can’t be when not everyone is doing everything they can to control costs.”

Dudek spoke after the most recent meeting of Governor Rick Scott’s healthcare and hospital funding commission. The workgroup is charged with  examining healthcare costs. It was borne out of a big fight over whether Florida should tap into federal funding to expand the existing Medicaid program to more people. The initiative failed. But the conversation hasn’t stopped. Hospitals are shouldering the blame for the increases—and some observers say those prices could be brought down by tapping into alternatives, like out-patient ambulatory care centers that can handle minor surgeries:

The average charge of a colonoscopy by site was $4,800 at a hospital site, and $2,000 at an ambulatory surgical center. So more than twice as expensive at an hospital facility," said Rep. Jason Brodeur, R-Sanford. He presented a plan for ambulatory care and recovery care centers to the commission.

Earlier this year, the Florida House pushed a series of alternative healthcare proposals, including ambulatory care centers—in an attempt to bring down overall healthcare costs. The plan, along with the Senate’s Medicaid expansion proposal, failed. Brodeur opposed expanding Medicaid under the Affordable Care Act. He says Florida should be diversifying its healthcare systems, But Gadsden County Commissioner Eugene Lamb asked about what could  happen to small, rural hospitals, if new ambulatory care centers start up nearby.

“How will recovery care centers affect the ability of rural hospitals to survive?" Lamb asked. 

That’s based on a premise that over-charging people to stay open," Brodeur replied. "I think what needs to happen is you need to have a shift in federal payments coming down to keep rural hospitals open. I think we need to look at the reimbursement model for how they receive payments for uninsured and underinsured and uncompensated care.”

Brodeur also wants to bring more price transparency into the system:  

“Consumers don’t know what they’re getting. It’s a weird model in which you have some a third party is paying for services and the consumer has no idea what they’re being charged. It’s a good start to put prices in urgent care centers, but there’s an opportunity for consumers to understand what prices are for."

Brodeur’s plan would allow ambulatory care centers to keep patients overnight and establish separate centers where patients could stay for up to three days after surgery. The proposal is coming back next year, and has been billed as a less expensive alternative to hospitalizations. And AHCA’s Liz Dudek believes the commission is receptive to the idea of letting those ambulatory care centers do more.

“I think that there’s something the commission members heard that are food for thought for them and things we can follow up on the part of the commission on," she said.

Throughout the course of its meetings, the Hospital and Healthcare Funding commission has tackled most of the proposals put forward by the house earlier this year.