Proposal Would Privatize Medicaid in Florida (FL)
April 26, 2010
With a major Coral Gables healthcare entrepreneur and others stepping forward with major campaign contributions, Florida’s Republican-dominated Legislature is steering the way to let for-profit companies compete for contracts overseeing nearly every Medicaid patient, including those in nursing homes and the disabled.
In what would be a first in the country, the House and Senate have passed bills to expand statewide a cost-cutting 2006 experiment in five counties that shifts the administration and risk of the insurance program onto the private sector.
Florida spends $8 billion annually on its 2.7 million Medicaid patients, with the federal government spending an additional $11 billion. Supporters estimate the House bill could save between $3 million and $16 million in its first year in Miami-Dade County and flatten the estimates of fast-rising future costs statewide.
Republicans, who control both chambers, are pressing the change and commercial health maintenance organizations have courted them heavily. The Florida GOP, its candidates and their fundraising committees received $1.4 million from HMOs like Aetna, Humana, Centene and others. That’s three times the $440,948 given to the Democratic Party, its candidates and their committees.
Miguel “Mike” Fernandez of Coral Gables has suddenly become one of the biggest donors to the Florida Republicans by giving $15,000 on Feb. 8 and $90,000 on March 18, according to state records. On April 13, Fernandez announced he and fellow investors were putting $150 million into the purchase of several Medicaid HMOs that will be combined into his new company, Simply Healthcare Plans.
Fernandez spokeswoman Karen Buchsbaum said Friday, “He has given contributions over the last 30 years to candidates in both parties who are friendly to his industry.”
The House and Senate proposals vary significantly, and the two chambers must forge an agreement by April 30 if anything’s to reach Gov. Charlie Crist for his signature. Even then it may not pass — the governor has expressed concern about the effect on the elderly and disabled.
So have doctors and patient advocates, who say Florida is rushing dangerously to broaden the pilot program before analyzing how it affects costs or patient care.
They say the experiment hasn’t gone well. Broward County officials, alarmed by patients who say they aren’t getting needed care, tried to pull out of the pilot but didn’t have the authority.
And physician advocacy groups say several doctors have dropped Medicaid patients in the pilot areas because HMOs refused all the tests and medicine they prescribed.
Patient advocates say HMOs automatically deny those requests because they keep as profit the portion of monthly per-patient government funds not spent on medical care.
Republicans in the Legislature say Florida can’t afford to wait, or rising Medicaid costs will overwhelm the budget.
Almost all states have some portion of Medicaid recipients in so-called “managed care,” but Florida would be one of the first to put the elderly and disabled requiring special care in the hands of commercial HMOs.
The House bill would broaden the pilot to all 67 Florida counties over five years, and immediately to Miami-Dade, the state’s largest county.
Critics say the state is abdicating its burden to care for poor and disabled patients by handing the controls to HMOs and so-called “provider service networks,” which are groups of physicians that could also win contracts.
In the pilot program, for example, Broward County obstetrician Dr. Aaron Elkin can no longer see pregnant Medicaid patients in the critical first trimester because private providers won’t pay for it.
If a patient has a suspicious breast lump, he said, timely mammograms and biopsies are impossible.
Sponsor Denise Gr imsley, R-Sebring, acknowledges “horror stories” under privatization, but said there are plenty from Florida’s long-standing state-administered system, too.
There will also be pressure on the system to cut costs, she said.
She also expects it to improve payment rates for doctors, and ultimately the number that participate, because HMOs with the most physicians under contract have preference in competition for the contracts.
“The way the bill is written today puts physicians and providers in the driver’s seat,” Grimsley said.
Groups like the 3,000-member Florida Academy of Family Physicians disagree. Executive Vice President Tad P. Fisher said there’s no incentive in the bill, and doctors currently lose money treating Medicaid patients. An average appointment costs the doctor around $80, including overhead. Medicare pays about $24.
“People forget that physicians’ practices are small businesses. There’s no incentive other than you really want to care for people that are underserved and are not healthy,” Fisher said. “You cannot break even.”