Medicaid managed long-term care: is Florida ready?

• Author: Bell, Rebecca C.

PART I. INTRODUCTION

Medicaid is a nationwide health insurance program, created in 1965 as Title XIX of the Social Security Act (1) for the poorest and sickest individuals. The Medicaid program operates through a federal and state partnership with the Centers for Medicare and Medicaid Services ("CMS") providing federal oversight. States must provide coverage of certain groups and services in order to receive federal funds for their Medicaid programs. However, states may include additional "optional" groups and services in each state plan. (2)

States use different methods of service delivery to Medicaid beneficiaries. In July 2011, a national average of 74.22% of Medicaid beneficiaries were enrolled in managed care organizations. (3) Although Medicaid managed care organizations grew rapidly in the mid-1990s, few states implemented a managed care program for Medicaid long-term care and instead used various models of delivering services within the fee-for-service system. (4) State and Federal governments have been looking at Medicaid managed long-term care again because of increased budget pressures. (5)

Part II of this article will describe how Medicaid managed care functions. (6) Florida's historical use of Medicaid managed care and the current, unprecedented implementation of a new statewide, mandatory Medicaid managed care program is examined in Parts III and IV. (7) Part V will explain developments on the federal level in the area of Medicaid managed care and specifically with the dual-eligible population, including the recently issued CMS Guidelines for providing long-term services and supports ("LTSS") through Medicaid waivers. (8) Part VI will evaluate Florida's implementation of Medicaid Managed Long-Term Care ("MMLTC") in comparison to the CMS Guidelines. (9) Part VII will look at Arizona as a model for Medicaid managed long-term Care. (10) The article concludes that although Medicaid managed care has potential to improve coordination of health care services and decrease Medicaid spending, Florida's Medicaid Long Term Care Program must be implemented with substantial, continual monitoring and oversight with emphasis on increased improvement in quality assurance measures and procedures. (11)

PART II. HOW MEDICAID MANAGED CARE FUNCTIONS

State lawmakers view Medicaid managed long-term care as a way to address the concerns over the increased enrollment and achieve budget stability over time through a capitated rate system. (12) The state Medicaid agency gives all responsibility to private managed care organizations ("MCOs"), (sometimes called health maintenance organizations ("HMOs') or provider service networks) for providing all long-term care services to enrollees for a fixed rate, called a capitated rate. (13) The fixed rate aspect of this model limits the states' financial risk by passing it on to the MCOs and allows the states to hold the MCOs accountable for service use and quality of care, which is impossible with a fee-for-service system. (14) The MCO assumes financial risk because if the cost of delivery of services is more than the capitated rate, the MCO loses money; if the cost of delivery of services is less than the capitated rate, the MCO profits. (15) The financial risk varies by program.

A state must usually apply to CMS for either a Section 1915(b) freedom-of-choice waiver or a Section 1115 research and demonstration waiver to establish and require enrollment in a Medicaid managed care program. (16) Before the Balanced Budget Act of 1997, (17) federal law required states to obtain waivers when a Medicaid program required beneficiaries to choose a primary care provider without being able to change the provider for more than one month at a time or the program only would be operating in part of the state or limited to certain categories of beneficiaries. (18) The passage of the Balanced Budget Act of 1997 provided a third statutory method of requiring enrollment in Medicaid managed care by creating section 1932 of the Social Security Act. (19) Instead of requiring a waiver, section 1932 allows a state to file an amendment to its Medicaid plan. (20) Unlike Section 1915 or Section 1115 waivers, neither budget neutrality nor cost effectiveness is a requirement under a Section 1932 Medicaid managed care program. (21)

PART III. MEDICAID MANAGED CARE IN FLORIDA

Florida first implemented Medicaid managed care in 1981 in Palm Beach County. (22) Between 1984 and 1990, Florida was one of five states operating a voluntary enrollment into Medicaid HMOs in certain parts of the state. (23) The Health Care Financing Administration ("HCFA," now known as "CMS") approved Florida's first 1915(b) waiver in 1990, which allowed implementation of the Medicaid Physician Access System ("MediPass"). (24) A variety of managed care plans developed after MediPass until 2002, when the final rules under the Balanced Budget Act of 1997 were implemented, requiring revisions to managed care contracts and quality assessment and improvement strategies by states. (25)

On October 19, 2005, CMS approved a Medicaid reform pilot that required mandatory enrollment in managed care plans under a Section 1115 research and demonstration waiver. (26) A waiver was required for this pilot program because of the unprecedented flexibility the program gave to insurers to (1) determine the benefits available for enrollees and (2) vary from the standard set of benefits upon which Medicaid beneficiaries rely. (27) The managed care plans were permitted to create customized benefit packages, which had to cover all mandatory services under the State Plan but could vary the amount, duration, and scope of the services. (28) The mandatory participation for certain populations in managed care existed as an additional unique aspect of the Medicaid Reform waiver. (29) The Temporary Assistance for Needy Families ("TANF") and the Aged and Disabled group comprising of Supplemental Security Income ("SSI") beneficiaries were the specific categories of Medicaid beneficiaries who were enrolled. (30) The Florida Agency for Health Care Administration ("AHCA") implemented the program for Medicaid beneficiaries in Broward and Duval counties on July 1, 2006, and expanded the program to Baker, Clay and Nassau counties on July 1, 2007. (31) Section 1115 waivers are initially approved for five years. Accordingly, the original Section 1115 waiver expired on June 30, 2011. In December 2011, CMS approved Florida's request to extend the Section 1115 waiver through June 30, 2014. (32)

PART IV. 2011 FLORIDA LEGISLATION AND WAIVER APPLICATIONS TO CMS

Although the initial phase of the Medicaid Reform program that began in 2005 was limited both geographically and also in its categories of Medicaid enrollees, (33) the program intended to expand mandatory participation to all Medicaid beneficiaries in future phases and geographically expand the program statewide. (34) The Florida legislature, during a 2010 special session, created a resolution urging the United States Congress to amend the Social Security Act and declaring its intent to amend the Florida Statutes relating to Medicaid. (35) Florida House Bill 7107 was signed by Governor Rick Scott on June 2, 2011, creating Chapter 409, Part IV, Florida Statutes, which: authorized the continuation of the 5-county pilot project; expanded mandatory enrollment into Medicaid managed care statewide; expanded mandatory enrolled populations to include virtually all Medicaid beneficiaries, except for the developmentally disabled; and directed the AHCA to apply for and implement state plan amendments and waivers of applicable federal laws and regulations necessary to implement the Statewide Medicaid Managed Care (SMMC) program. (36) The passage of the legislation occurred during a difficult economic environment, in which the state of Florida faced a significant budget shortfall with very little non-essential spending remained to cut. (37) These circumstances contributed to the urgency of passing a Medicaid Reform bill that accomplished these expansions.

On August 1, 2011, AHCA submitted both an Amendment to the original Section 1115 Medicaid Waiver and Demonstration project to CMS in order to implement the Statewide Managed Medical Assistance Program (providing acute medical care services) and also applications for Section 1915(b) and Section 1915(c) Medicaid Waivers in order to implement the Long Term Care Managed Care Program ("LTCMC") (providing long-term care services). (38) A Section 1915(b) Managed Care waiver allows states "to provide services through managed care delivery systems or otherwise limit people's choice of providers." (39) A Section 1915(c) Home and Community-Based Services ("HCBS") waiver allows states "to provide long-term care services in home and community settings rather than institutional settings." (40) A concurrent Section 1915(b) and 1915(c) waiver allows a state to simultaneously implement two types of waivers to provide a continuum of services to the elderly and people with disabilities, whether recipients reside in a skilled nursing facility, assisted living facility, or at home, with a managed care organization responsible for delivery of services. Existing federal regulations mandate that a state Medicaid plan may not require recipients who are also eligible for Medicare to enroll in a managed care organization ("MCO"). (41) States are able to circumvent this regulation through enrolling dual eligibles under a section 1115 waiver or under a section 1915(b) waiver. (42) CMS issued its approval for concurrent 1915(b) and 1915(c) waivers on February 1, 2013, for a three-year period beginning July 1, 2013, through June 30, 2016. (43) CMS requires the state to report performance-measure information to CMS on a quarterly basis for the first two years and requires the state to continue to meets its obligation under the American with Disabilities Act and the Olmstead decision. (44)

On June 14, 2013...