The state legislature in Florida has apparently decided to completely scrap the state's Medicaid program. Considering Medicaid fraud has been called the state sport, this is obviously necessary.
The problem is that the "new Medicaid" that Florida is trying to shape will essentially amount to giving more and more money to the same companies already caught or suspected in federal Medicaid fraud. A recent article calls it "the scariest part of scary Medicaid overhauls.
Isn't that like hiring Bonnie and Clyde as bank tellers?
On April 13, the Florida Tribune reported that "The House and Senate also have both agreed to use managed care as the main vehicle to lower costs and include requirements that long term care patients use managed care."
Back in June 2009, at least 56% of Florida's Medicaid enrollees were receiving their services through for-profit HMOs. In the summer of 2010, it was revealed that all eight for-profit subcontractors to one state Medicaid contract were cheating on the MLR (medical loss ratio, the percentage of each capitation payment spent on services for that specific individual). Amerigroup alone had to refund over $2 million to the state. Also last summer, there was talk of extending a minimum MLR to the state's other Medicaid contracts.
There's a battle going on in the Florida state legislature now between those in favor of establishing a 90% MLR, and those who want no MLR at all. Nobody is questioning turning the kitchen sink, water main and all, over to for-profit insurers.
If everyone ends up comprising on some "reasonable" MLR, it will still mean that state and federal funds are being diverted away from health services and into shareholder profits. Sean Hellein's whistleblower report demonstrated how casually insurance companies like Wellcare, Amerigroup and UnitedHealth (all named in the suit) treat the issue of committing Medicaid fraud, especially when it comes to falsifying MLR figures.
Between last summer's enthusiasm and the current Medicaid battle was the November election. Florida elected a new Governor who had been the CEO of a healthcare company holding the record for the country's biggest criminal Medicare fraud case. In Public Citizen's post-election night report on unregulated third party spending (subsequent to Citizens United v. Election Commission), Florida ranked second highest, with four congressional candidates splitting almost $2.9 million. One of those newly elected Congressmen dismisses any compassionate element of Medicaid (including, presumably, for children) as being evidence of a "bureaucratic nanny state" that can only be fixed with a "free enterprise solution."
Florida and Hawaii make two states where local legislative wars are being fought that have major repercussions for the future of Medicaid. These wars all have to do with the way states get their Medicaid money from the feds, and who they then give it to. Money for Health reform and stimulus funds is all channeled through different accounts. For instance, the federal DHHS report on stimulus funds paid out to states reported on March 31 2010 that the state of Florida had received $3 billion into thirty-seven different accounts. Each account is a possible contract to be bid out.
Every contract represents another opportunity to clear twenty percent in operating profit. With forty states reportedly considering (or in the process of) turning their ABD populations over to for-profit HMOs, the financial impact on the disability community could be overwhelming.
From our experience in Hawaii, when an ABD population is turned over to a for-profit HMO, that means the HMO now covers everything, including home attendants, medications, skilled nursing, home medical supplies, behavioral programs, durable medical equipment, even the cost of institutionalization. Hawaii's contracts with UnitedHealth and Wellcare clearly showed they received higher capitation payments for an individual if they were in institutional care than home care. Institutionalization therefore increases the premium while at the same time giving the insurer more power over how much of it has to be spent.
This is how the news of Florida Governor Scott's recently proposed cut in provider service reimbursement rates can relate to the MLR. Florida was already bidding out its ABD program to private HMOs like Amerigroup in early 2010. If ABD services are being channeled through new HMO providers, as they are done here, then reducing provider rates can be a back-door way of increasing corporate profit.
According to Amerigroup's 2010 annual SEC filing, the company's contract with the Florida Department of Elderly Affairs for Long-Term Care was renewed in September, they gained a new CHIP contract with the state in 2010 plus became a Medicare Advantage provider with Florida the same year. Overall, the company's net earnings were up 83%, helped along significantly by lowering the MLR by four percent.
Involved in the Florida legislative battle is SB 1972. On April 11, it was reported that Medicaid insurers, including the private HMOs, were backing an element of SB1972 that "would name them as agents of the state and give them the full protection of Florida's sovereign immunity, no matter how much damage they cause to an innocent disabled adult or child who has been entrusted to their care." As preposterous as it sounds, it is similar to an attempt here in Hawaii to assimilate child and protective services under the Medicaid ABD program. UnitedHealth and Wellcare employees suddenly had the right to threaten to remove a child from a family for abuse, if the family did not agree to the company's recommended reductions in Medicaid services.
Now we're putting Bonnie and Clyde in charge of the bank's vault.
Please sign our petition to get for-profit HMOs out of Medicaid and Medicare.
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