The Florida legislature recently passed a bill attempting to significantly expand the use of cost-sharing in its state Medicaid program. The bill, HB 7109, amended by Senate amendments, would require Florida’s Agency for Health Care Administration to seek a federal waiver to charge Medicaid enrollees a monthly premium, as well as a $100 copay for non-emergency services furnished in a hospital emergency room. The monthly premium for Medicaid would be $10 and would apply to every Medicaid enrollee, even those who are below 150% FPL. (This cost-sharing bill is companion legislation for another bill, HB 7107, which would establish a statewide managed care program.)
Both bills have been presented to Florida Governor Rick Scott, and Gov. Scott has indicated that he would sign both bills into law. However, of course, the Centers for Medicare and Medicaid Services (CMS) would need to approve any requested waiver before the cost-sharing provisions could go into effect.
Two articles about these bills are below.
KHN Staff Writer
May 15, 2011
Florida wants to be the first state in the nation to charge most of its Medicaid recipients a monthly premium as well as $100 for using the ER for routine care.
But even supporters acknowledge that the new fees, passed recently by the state legislature as part of a sweeping Medicaid measure, face long odds getting federal approval.
Today, four states have Medicaid premiums. But those fees, in accordance with federal law, apply only to people making more than 150 percent of the federal poverty level — $16,335 for an individual or $33,525 for a family of four.
Florida wants to impose the $10 monthly premium on all Medicaid enrollees – regardless of income — who aren’t in nursing homes. At least two-thirds of Medicaid recipients in Florida, and in the U.S. as a whole, have incomes less than 150 percent of the poverty level, according to the Kaiser Family Foundation. (KHN is a program of the foundation.)
About a dozen states charge Medicaid co-pays for non-emergency care, but none has fees higher than $20 for people making less than the poverty level. Eight of these states only charge the fee for recipients making above 150 percent the poverty level.
Consumer advocates want the Obama administration to reject both Florida measures because, they say, they will make it harder for people to get Medicaid benefits.
Florida lawmakers who supported the changes say they would make Medicaid, the state-federal health insurance program for the poor, more like private insurance and deter unnecessary use of hospital emergency rooms.
Rep. Matt Hudson, the Republican chairman of the Florida House Appropriations Health subcommittee, said the new fees would make “people personally responsible for their own health.” He added: “This is not a budgetary decision — it’s a philosophic stand. Everyone else in society is paying a portion of their own health care, including the military and retirees, so why shouldn’t this segment of the population?”
Diane Leone, spokeswoman for the Tea Party Network of Florida, said she supports the changes because the state faces a major budget deficit. “A $100 is a lot of money but if we keep clogging our ERs with folks who are there for non-emergency reasons, then that is a problem that can cost lives,” she said.
Hudson said he expects the Obama administration to either block the measures or approve them with the caveat that neither can stop Medicaid enrollees from getting care or coverage — which would nullify their impact.
While federal health officials have said they want to give states flexibility in running their Medicaid programs, the new premium could violate the 2010 health law, which bars states from making it more difficult for people to enroll in Medicaid, according to guidance from the U.S. Health and Human Services Department. That guidance said states could raise premiums to keep up with inflation but could not enact new premiums for groups they already cover.
In addition, federal law bars states from charging a premium to Medicaid recipients who make less than 150 percent of the federal poverty level.
The federal government has not yet evaluated the measure, which is expected to be signed by Gov. Rick Scott.
Florida’s ER co-pay, which is estimated to generate about $9 million a year, was aimed at Medicaid recipients who use the ER for primary care even though it’s cheaper to use a doctor’s office or clinic. National studies have shown that Medicaid enrollees use the ER about three times as much as people with private insurance. They tend to be sicker than people with private insurance and they have more difficulty finding a doctor to accept their coverage.
There is no official estimate of how much the $10 premium would generate. But if 2 million of Florida’s 3 million Medicaid recipients pay the fee, it would bring in $240 million.
Physicians and advocates for the poor criticized the fees.
“The ER $100 fee could simply put lives at risk,” Laura Goodhue, executive director of Florida CHAIN, a patient advocacy group. “You can imagine a host of examples, such as chest pains, false labor, children having problems breathing where a very low income person would have to make the decision to go to the ER or risk being fined $100.”
Dr. Peter Viccellio, vice chair of emergency medicine at SUNY-Stony Brook Medical Center on Long Island and a spokesman for the American College of Emergency Physicians, said Medicaid recipients use the ER more than privately insured individuals because they are sicker and have fewer doctors willing to see them. “When you add a co-pay you obstruct access to care for both emergency and non-emergency care,” he said. “This is not a way to save money, it’s a way to punish people for being poor.”
Peter Cunningham, senior fellow at the Center for Studying Health System Change, said an ER fee would reduce ER usage for both true emergencies and routine health needs. He said a better answer to curtail unnecessary ER use would be to develop more alternative health services that are open nights and weekends for people on Medicaid.
Florida Lawmakers Send to Governor Medicaid Managed Care Reform Package
By Drew Douglas
TAMPA, Fla.—Lawmakers May 6 approved two Medicaid reform bills (H.B. 7107, H.B. 7109) to establish a statewide, managed-care program.
The final vote of 79-39 on H.B. 7107 and 80-39 on H.B. 7109—a companion bill intended to conform current law to the new provisions in H.B. 7107—moved the legislation to the desk of Gov. Rick Scott (R), who supports the bills. The Senate approved and amended the bills that day by votes of 28-11 and 26-12, respectively. The House passed the legislation originally March 31.
The statewide managed-care program would follow a five-county pilot project begun in 2005, when then-Gov. Jeb Bush (R) initiated reforms to allow Medicaid recipients to choose and “customize” their own managed-care health services in the pilot project counties.
H.B. 7107 would “re-create the Florida Medicaid Program as a statewide, integrated managed care program,” consisting of managed medical assistance for current recipients, managed long-term care, and managed long-term care for persons with developmental disabilities, according to a House summary of the bill. H.B. 7109 would make date-specific, conforming changes that would align existing law with the proposed changes in H.B. 7107, the summary said.
The change would eliminate the existing fee-for-service structure and instead provide all Medicaid recipients in 11 geographic regions with a choice of managed care plans including traditional health maintenance organizations (HMOs), provider service networks (PSNs), and specialty plans with expertise in specific medical conditions, according to the House summary and a Senate summary of amendments to the bill.
H.B. 7107 would direct the Florida Agency for Health Care Administration (AHCA), which oversees the state’s Medicaid program, to select a limited number of plans to participate in the program, the summaries said. Plans would have to provide all covered services or could limit the provision of services to a specific population, based on age, chronic disease, or medical condition.
Under the Senate amendments, AHCA would have to consider a plan’s policies and procedures for preventing fraud and abuse. Selection preference also would be given to plans that are based in Florida and perform operational functions in Florida, either in-house or through contractual arrangements, by staff in Florida, the summary said. The measure also would direct AHCA to negotiate rates with each plan for the first year of the first contract term that would guarantee aggregate savings of at least 5 percent.
In addition, the Senate amendments would add plan contract and accountability requirements, including requiring plans to manage care well enough to reduce costs and to redirect resources to physician payments to raise them to Medicare rates, the summary said. AHCA would be allowed to fine plans that did not raise physician rates to Medicare levels after two years.
The bill also would require AHCA to seek, by Aug. 1, federal approval of waivers necessary to begin the reforms, including that Medicaid recipients pay a $10 monthly share of the premium and require recipients with access to employer-sponsored insurance to enroll in it using their Medicaid premiums to pay for it, according to the Senate summary.
In April, however, the Centers for Medicare & Medicaid Services told AHCA it would not grant a waiver for statewide implementation of the managed-care Medicaid program, saying at the time that lawmakers had not finalized legislation for the plan.
Supporters of the legislation hailed passage, saying the reforms would curtail out-of-control spending for what they said was a “broken” program.
“Medicaid is the single largest expenditure in our state’s budget, accounting for almost one-third of general revenue this year alone,” Rep. Robert Schenck (R), chairman of the House Health & Human Services Committee, said in a May 6 written statement. “With the implementation of Medicaid reform, we will end the pattern of recklessly spending taxpayer dollars on a system that fails to provide access to quality care to participants.”
Democrats, however, were critical of the reforms. In the House, Rep. Mia L. Jones (D) noted the bills did not include a medical loss ratio requirement that providers spend an identified percentage of the money they earn on patient care. “I have grave concerns that those who qualify for the Medicaid Medically Needy program—the working class Floridians whose incomes exceed the allowable Medicaid income limits—will not be able to afford the established premium if it is equal to their ‘share of cost,’ which equates to their gross income minus $200,” Jones said in a May 6 written statement.
In the Senate, where the Democratic caucus had opposed the bills, senators said there was little to no information on the cost savings or the quality of care given patients in five counties where Medicaid managed care reforms have been operating.