Fiscal Fitness: How States Cope
Florida restores planned cuts to its Medically Needy program
Florida Medicaid is expected to receive about $5 billion from The American Recovery and Reinvestment Act of 2009 (ARRA) during the 27-month period for which the stimulus package is in effect.
"This increase in federal funding will free up state money that would have been needed to fund the Medicaid program. This may now be used by the legislature to fund other areas of the state budget," says Medicaid director Carlton D. Snipes.
In order to receive the enhanced federal medical assistance percentage (FMAP), states must maintain the program eligibility standards that were in place as of July 1, 2008. Therefore, for Florida, continued funding of services to adults under the Medically Needy program and restoration of its Medicaid for the Aged and Disabled Program (Meds AD program) beyond July 1, 2009, was required.
Prior to the 2009 legislative session the Meds AD coverage was scheduled to expire July 1, 2009, and the broadly defined "medically needy" coverage group was scheduled to expire on June 30, 2009. The statute narrowed the medically needy coverage group definition to cover only pregnant women and children and was scheduled to become effective on July 1, 2009.
The two programs were funded with nonrecurring dollars and would not have carried forward into state fiscal year 2009-2010 without specific legislative action.
During the 2009 Florida Legislative Session, statutory language relating to the MEDS-AD program and the Medically Needy program was amended. Under current statute, both the MEDS-AD coverage and the broadly defined medically needy coverage group are now scheduled to expire Dec. 31, 2010. The statute also narrows the medically needy coverage group definition to cover only pregnant women and children, and this is scheduled to become effective on Jan. 1, 2011. The aged and disabled waiver extends eligibility and full Medicaid coverage to individuals who are disabled or age 65 and older and nondual-eligible, with some exceptions, with incomes at or below 88% of the federal poverty level. The program provides high-intensity pharmacy case management for its enrollees.
"Like all state agencies, we are currently in the process of developing recommendations for the next budget cycle," says Mr. Snipes. Enrollment as of June 30, 2009, was 2,563,906, an increase of 352,847 over the prior year. Despite these challenges, Florida Medicaid has made some efforts to expand services and improve access, such as attracting more dentists to participate in Medicaid. Legislation passed in 2008 changed Florida's licensure requirements to allow dentists licensed in other states to work in health care settings that serve some of Florida's most vulnerable citizens.
In response, Florida Medicaid is updating its policies to allow these out-of-state dentists to serve Medicaid beneficiaries. Also, group practices such as Federally Qualified Community Health Centers and educational institutions now are allowed to enroll as dental providers, so dentists who work at those sites may enroll and bill as treating providers affiliated with the facility.
Additionally, the state's Community-Based Substance Abuse Services Program presents a new opportunity for Florida counties to increase local public funds committed to substance abuse treatment for Medicaid recipients, by receiving federal matching funds for three new Medicaid-funded substance abuse services. "Alcohol and drug intervention services are included in this new Medicaid substance abuse program," says Mr. Snipes.
Cost-containment elements
Florida Medicaid has many cost-containment elements integrated into the program. These include enrolling beneficiaries in managed care and disease management programs for multiple disease states, incorporating utilization review and prior authorization protocol into program components to ensure appropriate utilization of services, and enforcement of fraud and abuse prevention measures. Here are some examples of these efforts:
Managed care.
Medicaid managed care results in a cost savings, as managed care capitation rates are discounted, on average, 8% from fee-for-service utilization experience. "Managed care also provides coordination and continuity of care that leads to improved access and better health for Medicaid beneficiaries," says Mr. Snipes.
Disease management.
Florida Medicaid disease management programs provide care management services for Medicaid beneficiaries identified as having asthma, chronic obstructive pulmonary disease, congestive heart failure, diabetes, end-stage renal disease, hemophilia, HIV/AIDS, high blood pressure, sickle cell anemia, chronic fatigue syndrome, fibromyalgia, and chronic back or neck pain.
The disease management programs provide support to the chronically ill with nurse care managers, educational outreach, and coordination of care with providers. According to Mr. Snipes, "The program has demonstrated improved health outcomes and cost-containment by reducing inpatient admissions, length of stay, and reduction in ER visits for the enrolled population."
Utilization review.
"The purpose of the Florida Medicaid Hospital utilization review program is to safeguard against unnecessary and inappropriate medical service rendered to Medicaid beneficiaries," says Mr. Snipes.
The Utilization Management Peer Review Organization performs prior authorization and concurrent review of Medicaid services for hospital, home health, private-duty nursing, and personal care services. This determines three things:
-whether services are reasonable and medically necessary or otherwise allowable under Florida Administrative Code, Hospital Services Coverage, and Limitations Handbook.
-whether the quality of such services meets professionally recognized standards of health care;
-whether the services are adequate, and are consistent with the provision of appropriate medical care, or could be effectively provided more economically at a lower level of care;
Additionally, the agency has implemented reimbursement and utilization management reforms. These include prior authorization for inpatient psychiatric days, prior authorization for nonemergency hospital inpatient admissions for individuals 21 years of age and older, authorization of emergency and urgent care admissions within 24 hours after admission, enhanced utilization, concurrent review programs for highly utilized services, and reduction or elimination of covered days of service.
Prior authorization of medical services.
Florida Medicaid prior authorizes various services to ensure appropriate utilization, including transplants, adult vision, hearing, dental, orthodontic, and ophthalmology. "Florida Medicaid's Durable Medical Equipment program does require certain equipment to be prior authorized," says Mr. Snipes.
Examples of items that require prior authorization are custom wheelchairs, noncustom motorized wheelchairs, hospital beds, augmentative alternative communication devices, external insulin pumps, and custom cranial remolding devices.
"We review each prior authorization based on our definition of medical necessity, any additional criteria, and if the item is the least costly alternative to meet the beneficiary's medical need," says Mr. Snipes. "As a result, the Durable Medical Equipment program contains costs by approving only the most medically appropriate equipment that will meet the beneficiary's needs."
Medicaid Preferred Drug List.
The Florida Medicaid Preferred Drug List continues to produce significant savings for pharmacy costs since its implementation as a mandatory program in 2005. The savings are achieved in two ways. First, there is cost avoidance through prior authorization required in prescribing protocols. Second, through the State Supplemental Rebate Program, negotiated cash rebates are received from manufacturers relating to placement on the Preferred Drug List.
"Florida Medicaid receives a net discount through rebates, both required federal rebates and negotiated state supplemental rebate agreements, of approximately 47% on drug costs in the program," says Mr. Snipes.
Fraud and abuse prevention.
Efforts involve all aspects of Medicaid program oversight, including provider enrollment, system edit claims management, policy enhancement, licensure, surveys, prevention methods, early intervention, identification by audit and recoupment of overpayments, sanctions, provider suspensions and terminations, and referrals to other state and federal agencies.
"The Medicaid program works continually to identify and prevent fraudulent and abusive activities," says Mr. Snipes. "Combating Medicaid fraud, abuse, and waste is a significant effort throughout the various divisions of the Agency for Health Care Administration."
Florida Medicaid is expected to receive about $5 billion from The American Recovery and Reinvestment Act of 2009 (ARRA) during the 27-month period for which the stimulus package is in effect.You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
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