Ending more than a year of talks, federal officials Thursday approved Florida’s proposal to extend a controversial Medicaid managed-care pilot program through June 2014.
The announcement renews a requirement that most Medicaid beneficiaries in five counties enroll in HMOs or other managed-care plans.
The pilot, which was a priority of former Gov. Jeb Bush, requires most beneficiaries in Broward, Duval, Clay, Baker and Nassau counties to enroll in HMOs or another type of managed care, known as provider service networks. It was originally scheduled to last five years and expire June 30, 2011.
The announcement Thursday also means that hospitals and other health providers will continue to tap into a $1 billion-a-year program that bolsters care for low-income and uninsured patients.
Longer term, the announcement sets the stage for Florida to pursue the goal of Republican leaders to transform Medicaid into a statewide managed-care system.
Liz Dudek, secretary of the state Agency for Health Care Administration, issued a statement late Thursday afternoon that said the focus of negotiations with federal officials now will shift to the statewide plan.
She and Gov. Rick Scott touted the success of the pilot “reform” program — success that has been hotly debated since the program started in 2006.
“Because of these successes, I look forward to implementing Medicaid reform statewide and allowing all of Florida’s Medicaid recipients to receive more-efficient, higher-quality care,’’ Scott said.
In granting the extension, the federal Centers for Medicare & Medicaid Services also required changes in the program. For example, as of July 2012, it will require that managed-care plans spend at least 85 percent of the money they receive on patient care, a concept known in insurance circles as a “medical loss ratio.’’
Republican lawmakers and insurance-industry officials have objected to such a ratio, arguing in part that it is difficult and arbitrary to separate medical care from other costs. Patient advocates contend such a ratio is necessary to make sure HMOs spend enough money on care instead of using it for overhead and profits.
The patient-advocacy group Florida CHAIN, which has backed a medical-loss ratio, sent an email this week that predicted federal approval of the extension. It also touted federal efforts to revamp parts of the pilot, which Florida CHAIN has long argued jeopardizes patient care.
“The only question was whether CMS would require Florida to reduce the harm of (the pilot’s) most dangerous aspects,’’ the email said.
“In that context, the fact that Florida must make some significant changes should be viewed as a victory for advocates fighting to protect access to health care for our most vulnerable patients,” it said.