Medicare Compliance & Reimbursement

New plan aims at lower costs for benes.

Health and Human Services Secretary Mike Leavitt approved on Oct. 19 a landmark Medicaid reform plan that will allow Florida beneficiaries to choose health care plans that best suit their needs--for the first time introducing competition and consumer choice to the government-funded health care program. And there's already talk of expanding the project nationwide.

Enrollees will play a more active role in deciding how they will receive health care by selecting from a group of state-approved managed care plans that will compete for their business. Benes will have up to 30 days to choose a health plan--otherwise, the state will automatically enroll them in a plan.

"The Florida demonstration will be very valuable in informing the national dialogue about reforming Medicaid to better serve the people who count on it," Mark McClellan, administrator of the Centers for Medicare and Medicaid Services, said in a statement. "This demonstration provides a framework for improving care and making Medicaid more sustainable without eliminating services or restricting eligibility."

Florida will calculate an annual amount that it will provide for each enrollee, which it will determine by reviewing the enrollee's "risk" or health status and historic use of health care services.

Benes will then choose a managed care plan with a benefit package that best suits their needs. The demonstration will allow plans to offer customized benefit packages, although each plan must cover all mandatory services under federal law. Plans may also enhance their benefit packages to attract more enrollees. In addition to having a choice of Medicaid managed care plans, benes--for the first time--can "opt-out" of Medicaid altogether and receive subsidies for their share of the cost to purchase employer-sponsored insurance.

If a beneficiary chooses employer-sponsored coverage, they will be entitled only to the benefits that plan covers as well as to any cost-sharing requirements--even if they exceed normal Medicaid limits. Benes may choose to rejoin Medicaid within 90 days of opting-out.

Another feature of the demonstration is the establishment of an "enhanced benefit account" program, which will provide direct incentives to enrollees who participate in state-defined activities that promote healthy behaviors, such as weight management, smoking cessation and diabetes management. The demonstration will allow beneficiaries to accumulate funds in their EBA and use them for non-covered health-related needs such as over-the-counter medications. The project will also establish a $1 billion annual fund to help the state pay safety-net providers caring for the uninsured.

Florida will begin phasing in the demonstration in Broward (Ft. Lauderdale) and Duval (Jacksonville) counties in July 2006. A statewide implementation plan will follow. The demonstration is approved to run through June 30, 2011.