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The TaxWatch Research Blog is a forum where our research staff can address topics and issues in a short format. Keep an eye on this space during Legislative Session for frequent posts making sense of the activity at the Capitol. 

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The "He-Said, She-Said" of Medicaid Managed Care

The Senate Appropriation Subcommittee on Health and Human Services learned just how expensive getting old is, particularly when nursing home care is required.  The first subcommittee meeting, which was held just before the holidays, focused on Florida’s Statewide Medicaid Managed Care, Long Term Care Program (SMMC-LTC).  Given a SFY 16-17 program budget of $3.97 billion, the Subcommittee (and TaxWatch) is keenly interested.  The Agency for HealthCare Administration (AHCA) Interim Secretary Justin Senior, various healthcare providers, and managed care companies presented to the Subcommittee.  Not unexpectedly, each entity offered a different perspective, particularly concerning payment issues.

The SMMC-LTC program grew out of the need for the state to control Medicaid spending.  The median annual cost of a semi-private room in one of Florida’s 683 licensed nursing homes is $87,600.  Considering the median net worth of Floridians is about $54,000, many cannot afford the cost of their long term care.  In 2012, Medicaid picked up the tab for nearly 70% of nursing home costs under a fee-for-service payment model.   

The roll-out of the SMMC-LTC was completed in March, 2014.  Along with the switch to a capitation payment plan, the program offers incentives to transition people from or delaying entrance to nursing homes in favor of less restrictive (and less expensive) options, including assisted living facilities and aging in place.  Managed care companies contract with providers for health-related services not covered by Medicare (home health aids, adult day care) and ancillary services (cell phones, utility deposits, food delivery, lawn care, etc.)   In order to qualify for enrollment in LTC you must be financially and medically eligible – meaning you must be 65-years of age or older (or 18+ and permanently disabled), require “nursing facility level of care,” and qualify for Medicaid. 

So is the program working for the 94,077 Floridians enrolled?  It depends on who you ask.

In July, 2013 a total of 50,122 Floridians were in nursing homes.  As of July 2016, the number has dropped to 42,161 people.  ACHA states that in 2016 alone, taxpayers saved $433 million in deferred costs by caring for Floridians in their homes and communities instead in more expensive nursing homes.  Clients and their families generally like the program and 76% of those surveyed indicated that their quality of life has improved.  In addition, ACHA has had very few complaints – less than 2 complaints per 1,000 enrollees – and they think this rate is the mark of a good program.  However, complaints, specifically payment complaints, are central to the issue.  Without a doubt, ACHA finds late payment of “clean claims” (claims that require no additional information) unacceptable and they have in place an arbitration firm to dispose of any issues.  However, the providers and managed care companies have very different stories to tell.

Providers indicate that many “clean claims” are not being paid within the mandatory 10 day period.   The Florida Healthcare Association, which represents 82% of the state’s nursing care centers, estimates that managed care companies are $135 million dollars behind in provider payments across the state.  Furthermore, providers fail to file complaints with ACHA due to the lack of resolution to previously filed complaints, calling into question the accuracy of the ACHA complaint rate.  On the flip side are the managed care companies.  One company, Sunshine Health, which covers 42% of Florida’s LTC clients, state that their payment history is “laudatory.”  The company states they pay most claims within 6.5 days with a 99.2% accuracy rate.

TaxWatch encourages a continued and open discussion on all the issues impacting the SMMC-LTC program.   This program is a vital safety net program, providing care for some of the most vulnerable Floridians, something we all must keep in mind moving forward.

Note:  Allison Wiman attended 12/14/2016 Subcommittee meeting.  Some of the information presented in this brief was provided verbally during the Subcommittee meeting.  A recording of the meeting is currently available on the    
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