Can Florida Really Alter Medicaid?

Florida Republican leaders made a clear statement during a special legislative session Tuesday: They want to overhaul the Medicaid program and don’t want the federal government tying their hands.

But that might ignore Washington realities. Congress this year required states to increase the number of people eligible for Medicaid in the future — the opposite of giving Florida more flexibility to run the program.

What’s more, federal officials won’t agree to a relatively straightforward extension of Florida’s Medicaid “Reform” pilot, which required thousands of beneficiaries to enroll in managed care plans. Instead, the federal government will require changes in the pilot.

Lawmakers used the special legislative session Tuesday to pass a non-binding resolution that called for getting greater flexibility to change Medicaid and gradually shifting beneficiaries statewide into managed care. But the bottom line is that carrying out such ideas won’t be easy — or maybe even possible.

“I don’t anticipate that the federal government is going to leave all the decisions up to states, especially when they (federal officials) provide such a large portion of the funding,” Senate Minority Leader Nan Rich, D-Weston, said.

Even Niceville Republican Don Gaetz, a key Senate player on the Medicaid issue, acknowledged he doubts the federal government will give the state wide-ranging authority to change Medicaid.

When asked what gives him confidence of such federal approval, Gaetz replied: “Nothing. I have no confidence in the federal government’s willingness to allow states to be laboratories for change and improvement.”

But Gaetz also said that doesn’t mean the state should give up trying to overhaul the $20 billion program. “Medicaid is metastatic,” he said. “It’s dangerous, it’s deadly, it’s costly and it’s growing.”

A major factor in the growth of Medicaid is the recession, which has pushed hundreds of thousands of Floridians out of jobs and employer-sponsored coverage. The Economic Policy Institute reported this week that the rate of workplace coverage dropped three percentage points between 2008 and 2009, to about 59 percent.

Senate leaders this morning also began an all-day meeting to listen to testimony about Medicaid. As a sign of the large financial stakes involved in the issue, early presenters included representatives of the hospital industry and the managed-care industry — along with the senior-advocacy group AARP.

Senate Health and Human Services Appropriations Chairman Joe Negron, R-Stuart, said during the meeting that he approaches the Medicaid overhaul as a “blank sheet of white paper” that will need to be filled in with details. Rich said the “$64,000 question” is how to fix the system, not whether it needs to be fixed.

“We all agree the system is broken and it needs to be reformed,” said Rich, who has long been involved in health and human-services issues.

The meeting and Tuesday’s resolution are initial steps in what likely will be months of debate about how to change the program, which has gobbled increasingly large chunks of the state budget in recent years.

Also during Tuesday’s special session, lawmakers overrode Gov. Charlie Crist’s veto of $9.7 million in funding for the Shands teaching hospital in Gainesville. The veto in May stunned lawmakers and also threatened millions of dollars in federal matching funds for other teaching hospitals.

House Speaker Dean Cannon and Senate President Mike Haridopolos, who were sworn into their offices Tuesday, have made seeking freedom from federal requirements a rallying cry as they prepare to tackle Medicaid during the spring legislative session.

Haridopolos has repeatedly likened the idea to federal welfare reform in the 1990s, which gave states a large amount of leeway in running aid programs. Despite possible federal obstacles, he said passing the resolution Tuesday was a start toward revamping Medicaid.

“I think we just clearly laid down the gauntlet,” the Merritt Island Republican said. “We’re going to take this on.”

The Medicaid resolution, which passed on voice votes in the House and Senate, only expressed the Legislature’s intent and does not make actual changes in the health program for low-income people. But it touched off a Senate debate that likely will be a preview of what is to come.

Along with calling for the federal government to give Florida more authority in running the program, the resolution also makes clear that Republican leaders want to gradually shift almost all Medicaid recipients into managed-care plans — even frail seniors who qualify for long-term care.

Sen. Mike Fasano, R-New Port Richey, objected to the possibility of putting seniors into HMOs and said lawmakers should not have taken up the resolution Tuesday.

“This goes beyond telling Congress to just leave us alone,” Fasano said.

But Negron said using managed care doesn’t necessarily mean enrolling people in HMOs. It also can involve such things as provider-service networks, which are local managed-care organizations that typically are linked to hospital systems.

“If you vote yes (on the resolution), you’re not voting to put a soul in an HMO,” Gaetz said.

The House and Senate spent the 2010 spring session working on changes to the Medicaid system but could not reach agreement on a final plan. Instead, lawmakers directed the state Agency for Health Care Administration to seek federal approval for an extension of the pilot program, which requires most Medicaid beneficiaries in Broward, Duval, Nassau, Baker and Clay counties to enroll in managed-care plans.

But federal officials have informed the state that they won’t approve a straight extension of the current program and will seek changes. AHCA and federal officials have been in discussions about the issue.

Greg Mellowe, policy director for the patient-advocacy group Florida CHAIN, said in an e-mail that the federal response to extending the pilot raises questions about whether even that program could expand further.

The “more grandiose proposal (in the Medicaid resolution) would seem to be a non-starter,” he said.

–Capital Bureau Chief Jim Saunders can be reached at 850-228-0963 or by e-mail at jim.saunders@healthnewsflorida.org.