Pamela A. MacLean
RedwoodAge.com

Florida is the latest state to approve a plan to shift thousands of poor and elderly beneficiaries into HMOs and other managed-care plans to replace a traditional fee-for-service plan. But a new study of the Long-Term Managed Care portion of the plan warns that hasty changes could leave Florida's vulnerable elderly population forced to choose from among confusing private plans with fewer services and ultimately produce little savings for the state.

The state's long-term care plan calls for a shift from fee-for-service payments under Medicaid to a private insurance exchange with negotiated rates among managed care plans. 

One goal is to shift covered adults to more cost-effective community-based long-term care services and away from costly nursing home care.  But Florida already has 27,000 people on waiting lists for community-based service programs and the state's health agency has indicated the new program does not provide additional slots for home and community-based services, according to a study by Laura Summer and Joan Alker for Dupont Fund and the Health Policy Institute of Georgetown University.

On top of that, the state ranks 49th in the nation for home health aids, according to the Dupont Fund study.

Florida's 2011 Managed Care Legislation, HB7107, has not yet taken effect because the state must win federal waiver in order for some of the changes to Medicaid to take effect.  The state has conducted experimental pilot programs for five years in five counties and how hopes to expand to all 67 counties.  The overhaul could mandate managed-care enrollment by October 2013 for seniors who need long-term care, including many with dementia.  But the test has drawn critics.

"To date, there is no credible research or data indicating that the pilots have been effective at achieving their goals," according to the  Florida Public Interest Research Group (PIRG), which opposes to change. "It is unclear whether they have saved money, and if so, whether that was at the expense of needed care.  For-profit Medicaid managed care plans also have a horrific track record of defrauding the state and denying care in order to increase profits," PIRG said in an October report.

Medicaid, a public insurance program for low-income Americans, has an enrollment of 55 million people nationally, and is likely to grow to 70 million, making it the largest health care program in the US.

Since the 1980's states have increasingly turned to  managed care to pay for and deliver care for Medicaid enrollees in an effort to increase access, improve care and sometimes reduce costs.  The traditional fee-for-service system requires beneficiaries to find a provider willing to accept Medicaid patents.  States with managed care purchase services through a network of providers who agree to accept enrollees under contracts and promise timely access to care.

The danger of managed care is that it may fail to improve patient care if the state lacks oversight, and what's know as the capitation payment rates are inadequate, the transition from fee-for-service are ill-conceived or provider networks are insufficient to meet the needs of the enrolled population, according to a 50-state survey of plans by the Kaiser Foundation in September 2010.

Nearly two-thirds of all Medicaid beneficiaries are enrolled in comprehensive managed care arrangements, roughly 26 million people, according to Kaiser.

In Florida's Long-Term Managed Care program, which will cover adults over 65 and younger adults with disabilities, affecting as many as 84,000 current Florida Medicaid beneficiaries, a significant growth in the eligible population is expected.  The Dupont Fund study estimated a 127 percent increase in Florida's over-65 population between 2010 and 2030, as baby boomers age.

Across the country only 10 other states operate capitated managed long-term care programs for the elderly, according to the Dupont Fund.  Research indicates the managed care payments account for only 6 percent of spending for Medicaid beneficiaries, suggesting the state may not see much savings.

The report also warned that selection of one of the new insurance programs may be confusing for the elderly or their families and require face-to-face counseling.  In addition, Florida plans to allow the new managed care organizations to market their products, requiring monitoring by the state.

In addition, Florida has made no provision for what will happen to people currently on waiting lists for services when the new program takes effect.  It is unclear whether current nursing home residents will get priority when they enroll in the managed care programs.

Finally, the study notes "the potential for savings in Florida may not be as great as in other states because spending is already relatively low. Florida ranks 34th in Medicaid nursing facility expenditures per person served.  For older people and adults with physical disability, Florida ranks 32nd in Medicaid Home and Community-based Services expenditures per person served."