Questions and Answers about Federal Approval of Florida’s Statewide Medicaid Managed Care Experiment

What exactly is being approved?
The federal Centers for Medicare and Medicaid Services (CMS) is granting final approval of Florida’s request to expand and intensify its existing Medicaid managed care experiment. Under “Statewide Medicaid Managed Care”, almost all Florida Medicaid recipients will be required to enroll in an HMO or HMO-like plan.

How did we get here?
The original version of the experiment – dubbed “Medicaid Reform” – was launched as a five-county pilot program through a federal demonstration waiver under then-Governor Bush in 2006. The experiment was plagued with problems, including the fact that ten plans dropped out between 2008 and 2010. After requiring the most serious issues to be addressed, CMS granted Florida a 3-year extension of the waiver in late 2011.

Meanwhile, the Florida Legislature voted during its 2011 session to expand and intensify the experiment, branding it Statewide Medicaid Managed Care. The state submitted its proposal to amend the current waiver to CMS in August 2011. After a lengthy process of review, negotiation and adjustments, CMS is now granting approval.

Wasn’t the approval of Statewide Medicaid Managed Care announced months ago?
In part. Statewide Medicaid Managed Care actually consists of two separate components: medical care and long-term care. The long-term care component was approved in February of 2013. Shortly thereafter, CMS also announced that it had reached an “agreement in principle” on the medical care component, with some details yet to be resolved.

Isn’t managed care already part of Medicaid?
Yes, but managed care can take many different forms. In particular, Statewide Medicaid Managed Care requires, for the first time, that all participants enroll in a managed care plan that is paid the same amount regardless of how much care is used (HMOs are the most familiar example). These plans, almost all of which are for-profit and report to investors, have a financial incentive to limit care.

Who is required to participate in Statewide Medicaid Managed Care?
Almost every Florida Medicaid recipient who not is enrolled in a limited version of Medicaid (e.g., family planning services only) will be required to participate in Statewide Medicaid Managed Care. By contrast, most recipients are not currently required to enroll in a managed care plan (some are exempt, others may enroll on a voluntarily basis). Statewide Medicaid Managed Care will greatly increase both the number of counties where enrollment in a plan is mandatory and the types of Medicaid recipients that are required to take part in the experiment.

How does Statewide Medicaid Managed Care relate to the “Medicaid expansion” opportunity created by the Affordable Care Act (and rejected by the Florida Legislature)?
They are separate and distinct issues. Medicaid expansion would allow more than a million low-income, uninsured Floridians who are not currently eligible for Medicaid coverage to qualify. Statewide Medicaid Managed Care does not change who is eligible for Medicaid. Rather, it changes how care is delivered and paid for.

Are advocates less concerned about Statewide Medicaid Managed Care than they were in the past?
No, advocates are no less concerned than they were. However, they do have more reason for hope that vulnerable recipients will not be left at the mercy of profiteering HMOs. The agreement between Florida and CMS is stronger than the one currently in effect in the five Pilot counties, and it’s much, much stronger than the original 2005 agreement. The new agreement includes numerous recipient protections, accountability and transparency requirements, and provisions designed to protect access to and quality of care.

In fact, the final version of Statewide Medicaid Managed Care is far less experimental in many ways than the original Medicaid Reform Pilot. Florida could have implemented most of it without the special permission required for a demonstration waiver. As a result, the additional safeguards and requirements means that recipients will likely be better protected than they would have been without the waiver.

What are some of the protections and requirements included in Statewide Medicaid Managed Care?
• Statewide rollout will occur in phases, based on a detailed “implementation plan” that must be pre-approved by CMS, along with a “comprehensive outreach plan.” CMS must also approve rollout in each region using an “assessment of readiness” and assure continuity of care for recipients throughout the transition period.
• Plans must cover all of the usual Medicaid benefits, and must provide them in an “amount, duration and scope” that meet the needs of the Medicaid population (added in 2011).
• Plans must meet a “medical loss ratio” requirement to spend at least 85% of taxpayer funding on activities directly related to the provision of care (added in 2011).
• Stronger protections intended to prevent past abuses (for example, requiring that the state consider the capacity of a plan’s provider network or a recipient’s provider relationships before assigning to a plan).
• Stricter standards for plan performance, increased plan accountability, more opportunities for stakeholder participation, increased transparency, and independent evaluation (added in part in 2011).

Why is there still cause for concern?
Most of the harm done to recipients in the Medicaid Reform Pilot was not the result of problems with the agreement with CMS, but rather with the state’s lack of monitoring and enforcement of the requirements in the agreement. For example, the state has been unwilling or unable to use the patient encounter data it has collected for years to answer critical questions about access to and cost of care. On paper, HMOs provide all required Medicaid benefits, but they also aggressively use “utilization management” methods such as prior authorization requirements. Recipients face numerous barriers to care already, and so these practices often result in detrimental delays or denial of care. The Florida Center for Fiscal and Economic Policy found that utilization of primary care and prescription drugs dropped by as much as half in the Medicaid Reform Pilot. In addition, Statewide Medicaid Managed Care will include new groups of very vulnerable patients (for example, foster care children) that weren’t even required to participate in the Reform Pilot.

When will Statewide Medicaid Managed Care begin?
As noted above, roll-out of Statewide Medicaid Managed Care will occur in phases by region. Recipients in the region(s) selected for the first phase will begin the transition no earlier than January 1, 2014. Rollout in other regions after that will occur as approved by CMS.

What should recipients and their advocates be doing to prepare?
Recipients throughout Florida need to be informed about the changes that will occur and how it will affect the way that they access care. Families and advocates will need to monitor what is happening closely and report their experiences. It will be especially important to identify the parts of the system or the policies that need to be fixed.