Managed Care Extension, LIP Money Approved

Aug 7, 2017
Originally published on August 4, 2017 3:57 pm

Dealing with two major issues in Florida's health-care system, federal officials Thursday approved a five-year extension of a statewide Medicaid managed care program and finalized a $1.5 billion pot of funding to help with charity care.

The announcement by the federal Centers for Medicare & Medicaid Services was not a surprise: State and federal officials have negotiated for months on issues such as details of the $1.5 billion for the “Low Income Pool” program.

But it means that millions of Medicaid beneficiaries will continue receiving care through HMOs and other types of managed-care plans through at least June 30, 2022. Also, it means that hospitals and providers such as federally qualified health centers will be able to tap into a larger amount of so-called LIP money to defray costs of caring for uninsured people.

“This (Medicaid managed care) extension has a positive and direct impact on people's lives and their ability to access care,” Seema Verma, administrator of the Centers for Medicare & Medicaid Services, said in a prepared statement. “Florida's program offers an innovative and realistic pathway to tackling some of Medicaid's biggest challenges.”

After heavy debate, Florida lawmakers in 2011 approving moving to a system that requires most Medicaid beneficiaries statewide to enroll in managed-care plans. Supporters said the system would help improve coordination of care and hold down costs, while critics argued patients could be hurt if managed-care plans put up roadblocks to care.

The system fully took effect in 2014, with health plans receiving contracts to serve beneficiaries in different regions of the state. The state Agency for Health Care Administration is in the midst of a procurement process that will determine which health plans are available for beneficiaries in the coming years.

A report by state analysts this spring estimated a Medicaid caseload of 4.14 million people during the 2017-2018 fiscal year, with 3.37 million in managed-care plans. The remainder will be in a more traditional “fee for service” system that involves direct payments to doctors and other providers rather than the state paying managed-care plans.

Meanwhile, Thursday's announcement on the Low Income Pool came nearly four months after Gov. Rick Scott said the state and federal government had agreed on $1.5 billion in funding for the program. Despite the tentative agreement in April, state and federal officials continued to work out details.

The money can go to hospitals, federally qualified health centers, rural health clinics and medical-school physician practices, according to details of the LIP money posted online Thursday by the federal agency. It can only go to help pay for what is considered charity care provided to uninsured low-income people --- not for care of low-income people who have insurance.

The $1.5 billion is an increase from $607 million last year, but it is not clear that the entire $1.5 billion will be tapped.

The LIP program involves local government sources, such as hospital taxing districts, putting up money that draws down federal funds. The overall amount that will be available will depend heavily on how much money the local sources put up, and some officials indicated earlier this year they did not think the combined amount would reach $1.5 billion.

U.S. Sen. Marco Rubio, R-Fla., issued a statement Thursday praising the overall announcement as “good news for millions of Floridians.”

“The extension will enable our state to continue providing care to Medicaid recipients through a managed care program, and the annual $1.5 billion LIP allotment will provide federal resources to Florida hospitals to ensure the most vulnerable patients have access to quality health care,” Rubio said.

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