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Liability caps: the tricky trade-off to medicaid managed care

By Lynn Hatter


Tallahassee, FL – The Florida legislature is looking closely at limiting lawsuits against doctor's, nursing homes and foster care providers that contract with the state. The proposals are part of the Republican-led legislature's effort to cut the state's Medicaid budget. But as Lynn Hatter reports, critics to the proposals say they also target specific populations of Floridians: low-income, elderly and foster children.

Right now the state has a problem. Many doctors don't participate in Medicaid because they lose money when they treat those patients. Republican Senator Joe Negron wants to change that.

"They feel like they have a big "M" stamped on their forehead that says "Medicaid" and in many cases they're treated like second class citizens because they're not able to find the care they're entitled to."

Negron is heading up the senate's version of a Medicaid bill to shift about three-million Floridians into managed care. But not enough of those networks exist yet. So to persuade healthcare providers to join in, both the House and Senate are looking at capping their liability. That would reduce the risk of expensive lawsuits for businesses, but groups like the Florida AARP say they are bad for people who use services like nursing homes which could see liability rates fall.

"With a cap of 300-thousand or 250-thousand on recovery, in essence, that's almost considering attorney's fees that have to come out of that and cost of litigation, then conceivably it could almost be a free pass for a nursing home that commits abuse against a senior."

McRay is talking about caps on non-economic damages, like pain and suffering. According to the Florida Healthcare Association, 60-percent of people in nursing homes are on Medicaid. Even though lawsuits have decreased over the past decade, they still occur, and Florida Healthcare Association spokeswoman Kristen Knapp says the tort reform is needed.

"The top 10-percent of the nations nursing homes, and the bottom ten-percent are being sued equally. So that goes to show that comprehensive tort reform is needed. Lawsuits don't do anything to improve quality care. The people who are working in the facilities, having adequate resources, those are the things that ensure that quality care remains steady in our facilities."

The trade-off is that lawmakers are preparing to cut Medicaid reimbursement rates by five to seven-percent, which would cost nursing homes 140-200-million dollars.

"Medicaid has historically underfunded nursing home care. So Every dollar we can keep in facilities and put toward resident care instead of going to lawsuits will help ensure that residents have the care they need."

Then there are foster care providers. Since the beginning of the year, the state has seen several reports of abuse and neglect from providers who are supposed to be protecting children. For that reason, many people are opposed to limiting liability for those providers. Take the case of Jorge and Debbie Garcia- Bengochea. They adopted three children almost a decade ago. Those children had been placed by a foster care provider with an abusive foster parent. As a result, they suffered severe abuse, which the provider knew about.

"If somebody took your child or your brother and raped them, and beat them and starved them and put them in a cage in the backyard and duct-taped them, there wouldn't be too many people that were saying, well, you know, should they be held accountable for what they did to someone in my family?' Its easy to look on the outside of that and say, well, there should be middle ground. But when it's your family, there is no middle ground."

Even without a cap, the Garcia-Bengochea's had to file a claims bill with the state, because the cost of treating their children surpassed the provider's liability payment.

"We're talking about children placed in care because they've already been abused and neglected, placed with the provider who finds them an alternative home, and then a child who's severely injured while in that care. That's the child we're talking about."

Christine Spudeas heads the children's advocacy group, Florida's Children first. When children are placed in foster care, they become eligible for Medicaid. And the providers receive their money from the state to care for the child.

"If there's a cap, when you go to seek the redress or take care of the injuries, that then becomes the shifting burden to the state. Because the taxpayer dollars and Medicaid pick up that deficit. That's the real connection it becomes a burden on Medicaid when there's a cap or reduced liability."

The foster care liability caps were originally in the Senate's Medicaid proposal, but have since been removed and re-introduced in a separate bill. The legislature is holding firm on its position that tort reform is needed. It also extends to doctors, hospitals and other physicians who do business with the state. Senator Negron says those caps are important to get them participating in Medicaid.

"We heard loud and clear from doctors all over Florida that one of the principal reasons they decide not to participate in Medicaid is because of their legal exposure so I think we do have to address it. For example, the volunteers in medicine program that we have in Martin county, where they have immunity they have no problem getting doctor's to work for free. So we want to make sure we have access while protecting people's right to due process."

The Florida Medical Association supports the legislation. The figures for the liability caps are different in both the House and Senate. And with no firm figure to react to, the Florida Medical Association has declined to comment for this story.