Managed Care Not Best Option for Frail Floridians, Needlessly Costs Taxpayers $68+ Million

Florida’s system of managed care does not work effectively for long-stay nursing center residents who can’t take care of themselves or be safely cared for in the community – and the system is costing taxpayers approximately $68.2 million in unnecessary fees each year, the Florida Health Care Association (FHCA) told a state Senate committee today.

More than 47,000 Floridians live in nursing centers and are enrolled in the long term managed care program. FHCA representatives told senators the program achieves cost savings when residents are either delayed from entering or transitioned out of nursing centers and into lower-cost settings – but those are not options for the many residents who need long term nursing center care lasting more than 60 days.

“Florida has a long-standing commitment to help elders remain in their homes or community settings for as long as possible. But we also must recognize that for more and more of the frailest residents, a nursing center is the best – perhaps only – realistic option,” Bob Asztalos, who manages FHCA's Government Affairs Department, told members of the Senate Appropriations Subcommittee on Health and Human Services.

A series of experts presented testimony during the subcommittee’s discussion of the managed long term care component of the Statewide Medicaid Managed Care system. They detailed how managed care is not an effective approach for many skilled nursing care centers, which care for nearly 73,000 frail elders and individuals with disabilities – most of whom require 24-hour complex medical care and have cognitive impairments, such as Alzheimer’s disease or other dementias.

Asztalos said Florida uses home and community-based care effectively to ensure that seniors receive care in the most appropriate place and the least restrictive setting. Less than 2 percent of Florida seniors over the age of 65 are living in nursing homes, less than half the national average of 5 percent.

The managed care program was designed to reduce the cost of providing health benefits, but FHCA presented several reasons why it is not effective for long-stay residents. Steve Jones, an accountant with the Moore Stephens Lovelace CPA firm that conducted a study of the system, testified that the state could save more than $68 million by exempting long-stay residents from managed care.

Jones noted that the number of enrollees in the program who receive care at nursing centers grew by 2.6 percent in the two years ending in July. He said by eliminating the need to contract with managed care organizations, the program would realize savings by eliminating $36.5 million in administrative fees and another $31.7 million in case management fees – expenditures that are not necessary for residents who remain in long-stay care.

“These numbers will only continue to grow as Baby Boomers age. This is money the state could instead be putting into direct resident care, to improve the lives of those who rely on quality care in the later portion of their lives,” Jones told senators.

By utilizing traditional Medicaid, case management costs would be cut by about 72 percent while administrative costs would be reduced by approximately 54 percent, he said.

The Managed Care system complicates the Medicaid process for long-stay residents who need consistent care. It places a barrier in the efficiency of the health services of these facilities and drives up unnecessary costs.

Patti Spears, administrator at Oakbrook Health and Rehabilitation in the rural Hendry County community of LaBelle, described some of the challenges faced by long term care residents at her skilled nursing center. Because many managed care companies will not authorize services across county lines, seniors who live in LaBelle but are treated at the nearest hospital in Lee County are then required to be placed in a nursing center in that distant county.

“The transition from a hospital to a nursing center is already a difficult experience, for the patient as well as the family members. Imagine the additional burdens of being placed in an environment that is far from home and unfamiliar. Your loved ones now have a 45-minute commute, on a busy interstate, to visit you,” Spears said. “These residents deserve better; this is not quality of life.”

Kristina Robinson, a case manager for Opis Senior Services Group, serves as a liaison between 11 skilled nursing centers and an assisted living facility, and the managed care staff they work with. She told senators that managed care case managers typically direct any issues or concerns back to the nursing staff – something the facilities could do themselves.

“Managed care case managers don’t bring any added service to those residents whose health and care needs prevent them from moving to a setting outside the nursing center. Their medical needs are simply too complex, and typically their families believe they are better served in the nursing center where 24-hour care is provided,” she said. “I believe the managed care system is simply duplicating the services we already have in place.”

For more information about Florida Health Care Association and their legislative initiative to exempt long-stay nursing residents from Florida’s Medicaid Managed Care System, visit http://tinyurl.com/FHCAMgdCare17. A copy of the Moore Stephens Lovelace report can also be found at that location online.