Stateline Story

Florida Is Test Bed for Medicaid Overhaul

FT. LAUDERDALE, Fla. - Florida's new, nationally acclaimed Medicaid pilot program is supposed to put patients like 60-year-old Marie Antoine in charge of their own health care to save money. Instead, she landed in the hospital.

Antoine, who is legally blind and suffers from high blood pressure caused by diabetes, was admitted for a day in February because she couldn't refill her blood-pressure medicine quickly enough under the new system, said her daughter, Betty Antoine.

It's exactly the type of avoidable - and costly - hospitalization that Florida's two-county experiment was supposed to prevent.

There's a lot riding on the outcome of the two-year trial that former Gov. Jeb Bush (R) called "the single biggest change and the boldest reform that any state has embarked on for the Medicaid program." This year, Florida is expanding the program to three more counties, and it could go statewide as early as next year if the Legislature opts to expand it.

Other states are watching, too. That's because rising Medicaid costs are swamping state budgets around the country. Accounting for 23 percent of all states' spending, the taxpayer-funded health program for 59 million poor Americans is gobbling up more state money than even primary and secondary education. The federal government wants to keep Medicaid costs down, too, because it pays for 57 percent of the $330 billion program.

Florida is one of several states trying to hold down medical costs for the families, pregnant moms, elderly and disabled on Medicaid. Its experiment emphasizes disease prevention, rewards for healthy behavior and managed care.

Idaho, Kentucky, Missouri and West Virginia revamped their Medicaid systems based on similar ideas. But Florida goes furthest in relying on market forces to drive down costs, leading former U.S. House Speaker Newt Gingrich (R) to routinely tout the Sunshine State's project as a model for a dramatic overhaul of Medicaid.

The promise is to save state money by making Medicaid patients healthier and by using private insurance companies to hold down those patients' medical bills.

That means putting Medicaid participants in the same type of health-insurance programs most Americans get through the private sector. So enrollees, who are poor and tend to be sicker than the rest of the population, now must navigate the same dizzying array of rules common in employer-based insurance plans. Some Medicaid participants face even more difficulties because they are blind, deaf, elderly or mentally ill.

Competition is the key to the Florida experiment. Medicaid enrollees can choose among 15 competing insurers in the Ft. Lauderdale area and six in the Jacksonville area. They can decide, say, between a plan with few out-of-pocket expenses or one offering more services. Insurers get paid for every recipient they enroll.

Although the competition among multiple insurers is new, managed care in Florida Medicaid is not; the state has used health maintenance organizations (HMOs) for 25 years.

Still, the switch can be jarring for patients used to Medicaid's typical "fee-for-service" coverage, where doctors and hospitals bill the state after treating patients.

Halfway through a two-year test run, Florida's experiment has met mixed success.

  • For starters, no one knows yet whether it will save money, one of the program's main goals. State officials say it's no more expensive than the old way, but they'll need six to nine more months to get enough data to compare costs.
  • State officials and patient groups disagree - often heatedly - over how chronically ill patients have fared. The state reports few complaints. But people who work with mentally ill, blind, deaf, disabled or HIV-positive patients say they're not getting needed treatment.
  • Patients and some doctors say fewer physicians, especially specialists, are taking Medicaid patients in the two counties that are part of the experiment. But insurers and the state say there's no exodus of doctors leaving Medicaid.
  • Patients aren't taking advantage of rewards they get for staying healthy, such as by quitting smoking and keeping doctor appointments. By June 25, participants racked up more than $3.7 million in rewards, which they can use to buy health products at drug stores. But, so far, they've only redeemed $93,000 worth.

At a June town hall meeting hosted by Medicaid reform critics, more than 100 people gathered in the auditorium of a Ft. Lauderdale community arts center, largely to voice frustration with the new program.

A nurse who treats AIDS patients in their homes said she now spends most of her time making sure her charges keep getting the treatments they need. Otherwise, she said, "all the work I've done with the patient is going down the tube."

The head of a treatment center for people with mental illness or chemical addictions said the facility was "living on its line of credit" because of payment delays. Later, a father complained his mentally ill son was hospitalized three times because his son's new insurance plan wouldn't cover his medicine.

Throughout the two-hour meeting, workers from Florida's Agency for Health Care Administration (AHCA), which administers Medicaid, sat in the back of the room, took notes and occasionally offered advice or explanations to the crowd.

Rafael Copa, who oversees the local AHCA office, said the problems that patients reported were similar to ones they had with Florida's regular Medicaid program.

Tom Arnold, Florida's Medicaid director, said in a later telephone interview that one advantage of managed care is that state officials can get help solving problems. For example, state officials can just call the insurance company to help find a specialist for a Medicaid patient, Arnold said.

A spokesman for Amerigroup, one of the competitors in the Medicaid pilot program in Broward County (which includes Ft. Lauderdale), said the company's approach is to identify patients with potentially serious conditions quickly by using entrance interviews and to get them preventative care. Amerigroup covers 1.5 million people in 10 states.

Making sure patients who are asthmatic, diabetic or pregnant get treatment early is cheaper than caring for them when complications arise, said spokesman Kent Jenkins. "The notion that you can cut your way to success in Medicaid is just false," he said.

But AIDS activists are so upset that they've filed suit, alleging the state isn't meeting one of its conditions for federal approval of the program by failing to offer the same level of services as under the old system. In fact, the AIDS Healthcare Foundation alleges the state actually offers fewer services now.

Some frustrations can be chalked up to the difficulties of shifting 170,000 patients to a new system. But other problems stem from the fact that managed care limits options for enrollees.

For example, Betty Antoine, who oversees her mother's health care, didn't receive notice that her mother's coverage was changing, so she was surprised when she couldn't refill her mother's medicine.

Afterwards, Betty Antoine had trouble finding her mother a new doctor. The state tried to help, but the first physician a counselor recommended was too far away and the other stopped accepting new Medicaid patients.

Charles Haire, 37, said his new insurance with dental benefits - a feature unavailable under the old Medicaid system - is more hype than help, because so few dentists participate.

Haire needed major dental work but found that only 23 of the 37 dentists referred by his insurance company accepted Medicaid patients - and only three would do procedure under Haire's insurance plan, which doesn't cover specialists, according to Gary Van Den Heuvel, who called the dentists on Haire's behalf.

Dr. Arthur Palamara, who heads the Broward County Medical Association's lobbying efforts, said the trial means more doctors are turning away Medicaid patients. His diagnosis of the pilot project is simple: "It's been a disaster, basically."

The vascular surgeon from Hollywood, Fla., said the new system is a bureaucratic nightmare for doctors and their staffs. Instead of dealing with one insurer for Medicaid patients - the state - doctors in Broward County now must negotiate with 15. Doctors often don't break even for services they give to Medicaid patients. With the added burden of extra staff time for the additional paperwork, many doctors just stopped seeing Medicaid patients, Palmara says.

Arnold, the Medicaid director, isn't buying it.

According to him, 97 percent of Medicaid doctors before the switch still treat Medicaid patients now. Plus, he said, the insurers' provider networks include physicians who didn't see Medicaid patients previously.

A May report by Georgetown University researchers studying the Florida pilot project found that 38 of 141 responding physicians said they planned to stop taking Medicaid patients. Only 8 percent of the doctors who received surveys responded.

The new system can make it harder to get care beyond the doctor's office, too.

Howard Kaplan, a Medicaid recipient who initially liked Medicaid reform, since soured on it. In an interview shortly before starting a morning shift at a downtown Ft. Lauderdale eatery, Kaplan said he went without his prescription antidepressant, because the 50 mg tablets weren't covered by his insurance; he only resumed taking it when his pharmacist discovered the 100 mg tablets of the same drug were covered and cut them in half, he said.

Kaplan also had a tough time redeeming his healthy living credits at the drug store. He showed a letter from the state saying he earned $30 worth of free over-the-counter goods. The letter even told drug store cashiers how to ring up the items. But the staff atWalgreen's pharmacy didn't know which items were covered or how to enter the sales. Kaplan decided the rewards weren't worth the hassle.

Arnold, the Florida Medicaid director, said most pharmacies are now aware of the program and can handle it. He said recipients might not be spending their credits because they're saving them for later.

"I don't know that it's bad that people aren't rushing out to spend those dollars. I could even interpret that to mean they're getting the care they need through their managed care entities," he said.