FHCA analysis of House Medicaid reform proposal

On Monday, the Select Policy Council on Strategic & Economic Planning released two proposed committee bills (attached) mandating Medicaid managed care coverage for all beneficiaries including seniors needing long term care services. The proposal would be fully implemented over a five year period, beginning with an expansion of the current “Medicaid Reform” pilot program to Miami-Dade counties in 2011. The long term care component of the plan would require implementation to begin by July 1, 2011 with full implementation by October 1, 2012. The Council workshopped the bills in their meeting Tuesday night and is expected to amend and vote on the bills during their meeting next Monday, April 12th.

PCB 10-03 creates a new section of law entitled “Medicaid Managed Care” which creates provisions for the Medicaid managed medical assistance program, the managed long term care program, and the managed long term care for persons with developmental disabilities program. The agency is required to adopt any rules necessary to comply with or administer the program and to apply for and implement state plan amendments or waivers of federal laws and regulations necessary to implement the program.

Specifically, sections 409.978-409.985 is created to describe the long term care managed care program. As noted, the agency shall begin implementation of the statewide program by July 1, 2011, with full implementation by October 1, 2012. Medicaid recipients requiring nursing facility care as determined by the CARES Program and who are either 65 years of age or older or eligible for Medicaid by reason of disability are eligible for the program. All Medicaid recipients who are either residing in a nursing facility or enrolled in a Medicaid waiver program on October 1, 2012 are automatically eligible. The bill further defines the benefits available under the program.

The state will be divided into six regions and a specified number of qualified plans will be procured for each of the six regions. Qualified plans may be managed care entities or long term care provider service networks (owned by health care providers) or entities qualified as Medicare Advantage Preferred Provider Organizations, or Medicare Advantage Special Needs Plans. Plans must offer a network contract to all nursing homes, hospices, and aging service providers in their region during the first contract period after a qualified plan is selected, but may exclude the provider from the network after 12 months for failure to meet quality or performance criteria. Nursing homes and hospices are required to participate in all qualified plans in the region in which the provider is located.

Plans are required to pay nursing homes an amount equal to the nursing facility-specific payment rates set by the agency. Incentives are provided to Plans to reduce institutional placement and increase the utilization of home and community based services. The bill also establishes medical loss ratios that require Plans to spend at least 80 percent of Medicaid premiums on medical services and direct care management or pay a fine.

PCB 10-04 is contingent on the passage of PCB 10-03 and makes the statutory changes necessary to implement the managed care program. This bill eliminates the language that created Florida Senior Care, but more importantly provides language that will allow nursing homes to be more competitive in a managed care environment. Specifically, the bill creates a nursing home licensure workgroup that will develop a plan for license flexibility to assist nursing homes with developing comprehensive long term service capabilities, extends the CON moratorium for additional community nursing home beds until October 1, 2015, and suspends any CON condition requiring maintenance of specific minimum Medicaid utilization effective July 1, 2011.

There are still several issues, such as prompt payment, electronic claims processing and EFT payments, patient responsibility, conflict resolution, etc. that FHCA will continue to address with legislators and staff as this process moves forward.