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Politics / Issues

State Nixes Changes for Medically Needy

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After running into objections from the federal government, Florida has scrapped a proposal that would have required tens of thousands of people with debilitating illnesses to enroll in managed-care plans.

Gov. Rick Scott this week signed a bill that repealed part of state law calling for people in the "Medically Needy" program to participate in managed care and to pay monthly premiums. The Medically Needy program serves people, such as transplant recipients, who have costly medical conditions but do not qualify for regular Medicaid coverage because of their incomes or assets.

Lawmakers included Medically Needy in a 2011 law that requires almost all Medicaid beneficiaries to enroll in managed-care plans, an enrollment process that involves having private insurance companies administer coverage and changes the way medical providers get paid for treatment. But the federal Centers for Medicare & Medicaid Services objected to the Medically Needy part of the law because of the proposed monthly premiums.

State Medicaid director Justin Senior told lawmakers as early as last September about opposition from federal officials, who would have needed to approve what is known as a Medicaid waiver for the Medically Needy changes to take place.

Shelisha Coleman, a spokeswoman for the state Agency for Health Care Administration, said this week the federal government never formally denied the state's waiver request, but AHCA stopped actively pursuing it.

The bill (HB 5201) signed this week by Scott is related to the state budget. While it repealed the proposed Medically Needy changes, people in the program will continue to receive services, with bills getting paid through a more-traditional system known as "fee for service," state officials said.

House Health Care Appropriations Chairman Matt Hudson, R-Naples, signaled frustration at the federal government's unwillingness to allow the state to make the changes in the Medically Needy program.

"The federal government has repeatedly promised states flexibility on issues such as implementing the massive Medicaid expansion authorized by Obamacare,'' Hudson said in an email Tuesday, responding to questions about the issue. "Unfortunately, such flexibility is certainly not apparent in the original Medicaid program, where Medically Needy participants deserve innovative improvements."

The Medically Needy program has spurred debates for years in Tallahassee, as it serves people with severe medical conditions, but also has high costs. The hospital industry has particularly fought to protect the program, at least in part because of concerns that Medically Needy patients would otherwise show up for care and not have a way to pay.

A February report from state analysts projected the program's caseload at more than 52,000 people this year and more than 57,000 during the upcoming 2014-15 fiscal year.

To be eligible for coverage, people in the program have been required to show they incurred certain amounts of expenses. But critics questioned the premium proposal in the 2011 law because they argued Medically Needy beneficiaries would be required to pay larger shares of their health-care costs.

Supporters of the changes, however, contended that managed care handed by private companies would help coordinate services for Medically Needy beneficiaries. Also, they pointed to part of the law that would have allowed beneficiaries to get coverage for up to 12 months if they paid the premiums. Beneficiaries have been required to qualify every month.

Senior, the Medicaid director, told lawmakers in September that the federal government limits the amount of cost sharing that can be imposed on beneficiaries, and the proposed premiums exceeded those caps. Without the premiums, he said, the managed-care plans in the revamped Medicaid system would not receive "actuarially sound" rates, which also is not allowed by the federal government.