Fla. pilot program to cut Medicaid costs raises new questions

FORT LAUDERDALE, Fla. — To visit the low-rise medical offices dotting the sun-bleached highways of Broward County is to meet doctors and patients who complain of being guinea pigs in a social experiment gone wrong.

They are part of a five-year pilot program designed to test whether Florida can reduce spending on Medicaid, the public insurance program for the poor and disabled, by largely turning the program over to for-profit HMOs. Success would mean getting a handle on one of the fastest-growing and most vexing expenditures confronting states.

But it’s unclear whether the pilot, which is also underway in four other counties, has achieved that. Health professionals here say any savings have come at a high cost: the quality of care. And they are outraged over the legislature’s decision last week to essentially expand the pilot statewide, which will be carefully watched by other financially strapped states across the nation.

“I just don’t understand why Florida is pursuing a failing model,” said Arthur Palamara, a vascular surgeon in the city of Hollywood.

The pending law, which requires the approval of the Obama administration, largely drops the traditional fee-for-service model under which a state reimburses doctors and pharmacies for every procedure or drug provided to a Medicaid patient. Instead, virtually all patients would be required to sign up for a private HMO or similarly run provider-service network set up by hospitals and doctors. These managed-care organizations would be paid a set amount for each patient’s care, taking the hit for any overruns but keeping most of any savings.

Unanswered questions

Florida’s plan would put the state at the extreme end of a national trend: Nearly all states have moved the majority of Medicaid recipients into some form of managed care over the past decade.

But they differ on key questions: Who should oversee management of the care — medical groups or private insurers? Who is covered: Only poor children and their parents, or more costly groups, such as the disabled, the elderly and patients needing long-term care? Should participation be optional or mandatory?

In Florida, private insurers are likely to cover the lion’s share of recipients, who will be required to choose a managed-care plan, exempting only a few groups, such as the developmentally disabled.

Tonya Guerrieri, a medical assistant to a neurologist, Gerald Goldberg, in the city of Sunrise, worries about expanding the private Medicaid HMOs because those in the pilot seem more likely than state-run Medicaid to turn down non-generic drugs even when Goldberg determines they are the only effective option. Among the examples: Nuvigil, a drug that helped one of Goldberg’s patients stave off the drowsiness brought on by Parkinson’s disease.

“We gave her samples, and she was like a different person on it,” Guerrieri said. “But [the HMO] denied it.”

Fear of doctor shortages

Palamara, the vascular surgeon, said the Medicaid HMOs have also exacerbated the doctor shortages by adding to steps and paperwork to get authorizations, prompting many to stop taking new Medicaid HMO patients.

Patients face dangerous delays for appointments with other doctors after he operates on them.

“Let’s say I place a temporary catheter inside someone’s neck in the hospital,” he said. “It will then take an extended amount of time to get it removed, and this really puts the patient at risk of infection.”

Although studies of Medicaid HMOs in other states suggest that they may reduce spending while improving care, researchers say the Florida experiment is inconclusive. It’s too difficult to calculate what Florida would have spent on patients had they remained in Medicaid, said Paul Duncan, a health-care expert at the University of Florida commissioned to evaluate the pilot.

“You want a fair apples-to-apples comparison, but of course this is a highly volatile population in a dynamic world,” he said. “The answer is pretty muddy.”

Most problematic, he added, the pilot has not produced enough data to determine whether savings were the result of managing care better — ramping up prevention, for instance — or stinting on coverage.

Given the concerns, it is an open question whether the Obama administration will grant the waiver necessary for the statewide version to take effect. Last month, a top administration official sent a letter suggesting that Florida would need to include new safeguards, such as requiring insurers to spend a high percentage of their revenues on patient care as opposed to administrative costs and profits.

State Sen. Joe Negron, who wrote the bill, said the measure included many administration suggestions.

“We learned . . . from the pilot,” he said. “My goal was to make sure our friends and neighbors on Medicaid receive the same quality of care as everyone else.”

But critics note that saving the state money was just as strong a motive: The law requires that organizations be paid less for each patient than what the state has been paying through the fee-for-service system.

Negron said this would cut spending by an estimated $1.1 billion in the first year.

That has appeal in a state that spends as much as 17 percent of its general revenue on Medicaid. Adding to the burden, like all states, Florida stands to lose a higher federal matching rate through stimulus funding that expires June 30.

If many doctors remain skeptical that the new system will work, it may be because their complaints about the pilot often center as much on the way it has been administered as with the underlying policy.

Lengthy admission delays

Aaron Elkin, an obstetrician and gynecologist operating out of a one-story building off a commercial strip in Hollywood, said his low-income pregnant patients now seem to face long delays getting approval to get on Medicaid and are sometimes rejected for reasons that are unclear.

“They’re trying to navigate this huge bureaucracy that’s so overwhelmed with figuring out all these additional steps and requirements, that the whole system is in disarray,” he said.

On a recent morning, Elkin entered a consulting room to meet with the latest case: a 35-year-old, Haitian-born hairdresser who had tested positive for HIV in November shortly after she learned she was pregnant. Because she is pregnant, she was allowed by the pilot program to choose between traditional Medicaid or a managed-care plan. But she was repeatedly rejected for both, leaving her unable to afford medication to control the disease on her own. She had to go without for nearly six months.

Later, Elkin managed to get her coverage by calling officials at the county Medicaid office.

She stacked the bottles of her newly acquired pills on a counter for him to review.

“How are you doing on these?” he asked.

The woman, who asked that her name be withheld, hesitated for a moment. “Well, good,” she said. “But it’s hard to take the pressure of it on my throat. It’s like my throat feels so infected I cannot eat rice or even water.”

“Okay, that may be a side effect we need to adjust for,” the doctor answered. “But right now, you really have to take them. . . . Your viral load is very high. Typically, we want to get it much lower before delivery to reduce the risk of transmission to your baby.”

Elkin flashed her an encouraging smile. It evaporated as soon as he walked out of the room.

“She needed this care months ago,” he said, shaking his head. “If this pilot gets expanded, they’re going to need to put in tremendous safeguards for patients, or it’s going to be a disaster. People’s lives are at stake.”

 
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