1993 Medicaid Reform Comes to Florida

April 2011
Management Home Page 

By Mick Raich, President, Vachette Pathology

Recent articles in the Wall Street Journal and coverage on public radio have brought to light the very real issues surrounding state Medicaid plans and their unique struggles. Several things are causing states to look at changes in their approach to Medicaid payments. First, eight million Americans have joined the Medicaid programs from 2007-2010, representing 2.5% of the nation's population. Second, the new health care law requires that the states not limit eligibility or they can lose their matching Medicaid funding. The federal government picks up 57% of the state Medicaid costs for services.

With these looming issues, states are looking closely at what they have to offer and are considering other options. Florida provides a good example of this - according to the new health care law, they would have to allow another two million people into Medicaid in their state alone. Even with 57% matching federal funds, they cannot afford this cost. As a result, they are looking at other options. They are already aggressive in their approach and have run a Medicaid managed care pilot program in Broward County. There are issues with these programs as Medicaid patients struggle to work through the arduous managed care rules for pre-authorizations and have serious treatment compliance complications.

Ethically, we may be approaching a shift here, as Florida has recently proposed a new Medicaid health care plan that would require some enrollees to attend smoking cessation and weight loss classes. There are legal implications also as the new proposed program would shield Medicaid providers from malpractice suits.

One can only imagine the protests this will cause. I can see the professional protesters in Wisconsin (yes, there are paid people protesting in Wisconsin at this time), caravanning down to Tallahassee to start the process all over again. Here they would be resolving the “unalienable right” to smoke, be overweight, collect free health care, and sue anyone who stands in their way.

The final note on the Medicaid changes in Florida is that the state wants managed care plans to take over this population, and will pay them a fixed amount for health care coverage of these patients. Basically the state is trying to capitate their Medicaid costs and outsource this to managed care plans.

What does this mean to pathologists? It could be the beginning of contracting via Accountable Care Organizations, also known as capitation, for all of their Medicaid patients. How does this all end? Not good.

I had the experience of working with hospitals and physicians in the 90’s in the Detroit metro area where this exact same thing was proposed and implemented. What happened? Basically all of the managed care plans folded after five years and defaulted on their debts; the pathology practices settled for around 5% of the total amount owed to them (compared to the average Medicaid payment of 18 cents on the dollar).

We all know that change is a constant; the only real issue is the volume of change. In this case the volume and impact of the new health care law is continuing to have ripple affects. It is like computer programming - often if you change one thing, you must change lines of seemingly unrelated code as everything is interconnected. Medicaid is the code and in the end, this will change how much everyone gets paid.

Mick Raich is the President / CEO of Vachette Pathology, the nations leading pathology consulting and management firm. He can be reached at 866-407-0763 or at http://www.vachettepathology.com