Florida’s Medicaid reforms initiated in 2006 aimed at statewide coverage expansion of the managed care system. In 2005, former governor, Jeb Bush, signed into law a federal waiver proposal to move recipients from the fee-for-service model to managed care (Senior, 2016). The rationale for this healthcare reform was to expand coverage to over 4 million uninsured Floridians to lower the percentage of the uninsured (Senior, 2016).
Adoption of the Reform
Managed-care plans were adopted in Florida after the approval of the federal waiver proposal on June 3, 2005. The permission followed Governor Jeb Bush’s push for a ‘Section 1115’ Medicaid Waiver from the national government to reform the state’s Medicaid program (Senior, 2016). The goal was to promote competitive health care benefits through risk-adjusted premiums for recipients. The resulting plans would offer the mandated services but allow for adjustments related to payment, period, and range of products Floridians would receive.
Since 2006, children from poor households, expectant mothers, disabled persons, and the elderly were enrolled in a Medicaid waiver pilot implemented in five counties (Senior, 2016). The recipients could receive primary and acute care services through managed care or provider-funded organizations. The program also included flexible, cost-shared benefits for the low-income pool (LIP). It entailed mandatory enrollment of the elderly, disabled persons, and poor households, and foster children (Senior, 2016). These groups qualified for full Medicaid benefits. Presently, under this plan, persons with long-term care (LTC) needs are eligible for post-acute and primary care benefits (Senior, 2016). These services are offered through Health Maintenance Organizations and Provider Service Networks engaged in the LTC program as prescribed in the waiver.
After prolonged discussions with the Center for Medicaid and Medicare Services (CMS), Florida received the approval to shift to managed care plans in 2013. Subsequently, a statewide expansion of this program commenced with the launch of the Statewide Medicaid Managed Care (SMMC). The SMMC program comprises two parts: “Long-term Care (LTC) and Managed Medical Assistance (MMA)” (Senior, 2016, p. 2). The first component expands LTC services to all Medicaid-covered populations through the Nursing Home Diversion program (Senior, 2016). In 2013, the state began a phased transfer of Medicaid recipients to LTC managed care, completing it in 2014. The MMA program increased the coverage of the pilot waiver from five sites to statewide health care. Under this plan, comprehensive Medicaid benefits are available to all participants, except those enrolled in the “family planning programs, breast and cervical cancer services, and pediatric care” (Senior, 2016, para. 7).
Since the 1990s, Florida has been implementing a case management plan known as MediPass (Senior, 2016). Under this program, about 600,000 enrollees could access care from 5,000 healthcare organizations. Those with chronic conditions received services from subcontracted providers. However, as of August 2014, the state began to move MediPass beneficiaries to the managed care program (Senior, 2016). Under this program, Medicaid-covered children are eligible for either DentaQuest or MCNA Dental for their dental care needs (Senior, 2016). Florida’s MMA aims to improve quality, enhance access, and reduce spending. It also seeks to strengthen care coordination, expand benefits for enrollees, and manage costs.
The Medicaid budget is financed through state and federal funds – a joint funding structure. This financing model ensures better responsiveness to state priorities and needs. In 2014, Florida spent $23bn on its Medicaid program with $9.5bn coming from state funds (Snyder & Rudowitz, 2015). The remainder ($13.5bn) came from the federal disbursements through the Federal Medical Assistance Percentage (FMAP), enhanced matching rates, and Disproportionate Share Hospital (DSH) programs. FMAP matches national allocations with each $1 spent by the state on Medicaid. Thus, this funding model responds to the actual expenditures and needs of the beneficiaries. In 2014, for every dollar Florida allocated to this program, the central government gave $1.43 (Snyder & Rudowitz, 2015). The statewide expansion of Medicaid calls for enhanced matching rates to cater for the high number of beneficiaries. In particular, the Affordable Care Act (ACA) extends the eligible populations, resulting in additional costs. According to Snyder and Rudowitz (2015), federal funding of the ACA Medicaid expenditures stands at 100%, to be phased down to 90% by 2020. There is also an administrative matching rate (<5% of the budget) related to costs incurred by the state in the enrollment processes.
DSH payments are given to healthcare organizations serving a disproportionate number of Medicaid recipients and poor Floridians without medical insurance. This form of financing has played a role in stabilizing the ‘safety net’ of providers. However, under the ACA, DSH payments are set to decline beginning in 2018 due to lower “uncompensated care costs” related to expanded Medicaid coverage (Snyder & Rudowitz, 2015, para. 12). In addition to federal funds, the state also contributes to this program. The non-federal funds going into Medicaid primarily comes from the state coffers. In 2014, Florida appropriated $9.5bn (41%) to Medicaid spending with the remainder coming from the federal allocation (Snyder & Rudowitz, 2015). Flexibility is required to cater to competing priorities. Over the years, Florida has enhanced its share of the Medicaid budget through provider capitation.
The Medicaid Reform Program has had a profound effect on health care coverage and delivery in Florida. Between 2006 and 2012, about 1.8 million persons (uninsured and underinsured groups) received inpatient care with another 10.8 million benefitting from outpatient services in Floridian hospitals (Duncan, Hall, Harman, Bell, & Kinsell, 2015). Those served by non-hospital providers rose by 255,500 to 694,300 individuals over the same period. Hospital care included diagnostic and radiology services, surgeries, emergency care, etc. The $35 million LIP program has had a significant impact on access to care by poor households and Medicaid eligible persons. About 60% of LIP’s tier one and tier two initiatives have impacted health care utilization by these populations (Duncan et al., 2015). The number of patients receiving Enhanced Benefits Account (EBA) credits for engaging in healthy behaviors – physician visits, PSA tests, etc. – has increased in Florida, earning them $37 million between 2010 and 2014 (Duncan et al., 2015). There has also been a growth in services, providers receiving LIP, and enhanced matching rates and health care utilization.
The expansion has had an impact on healthcare costs in Florida. Now, the financial burden of providing care is shared between the hospital and non-hospital organizations. Thus, the expansion has reduced the cost of uncompensated care that was previously borne by hospitals alone. The estimated savings from the expanded coverage are about $1.3 billion (Duncan et al., 2015). The outcome of the shift to managed care is improved solvency in Florida’s health care system. The expansion came with increased Medicaid allocation – $9.5bn in 2014. The federal funds have fuelled the growth of Florida. Medicaid injected $8.9 billion to the local economy and created over 71,000 employment opportunities in 2014 (Duncan et al., 2015).
Duncan, R. P., Hall, A. G., Harman, J. S., Bell, L. L., & Kinsell, H. S. (2015). Florida Medicaid reform evaluation: Final low income pool milestone statistics and findings report for DY8: SFY 2013–14. Gainesville, FL: University of Florida.
Senior, J. M. (2016). Florida Medicaid: Statewide Medicaid managed care. Web.
Snyder, L., & Rudowitz, R. (2015). Medicaid financing: How does it work and what are the implications? Web.