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Florida takes next step in Bold Plan to reform Medicaid

August 31, 2005
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State outlines improvements to healthcare system for Florida's most vulnerable citizens

TALLAHASSEE - Governor Jeb Bush today announced the online publication of Florida's application for a waiver from the Federal Government to transform Medicaid, the state federal partnership charged with providing healthcare to more than 2.1 million vulnerable, disabled and elderly Floridians. The plan, detailed in the application, reinvents the program to look and operate more like a private health care market. Florida will submit the application to the Federal Centers for Medicare and Medicaid Services (CMS) in thirty days.

"The goal of Medicaid reform is improving the quality of healthcare for our most vulnerable citizens," said Governor Bush. "This plan maintains the same eligibility requirements as the current program, but empowers patients to direct their own healthcare, encourages stronger doctor-patient relationship, expands access and increases choices."

The plan responds to suggestions from Medicaid participants, legislators, stakeholders, community leaders, providers and advocates collected during the last six months by the Agency for Health Care Administration (AHCA).

Under the law (Senate Bill 838) authorizing a statewide reform of Medicaid, Florida is required to post the application online for 30 days before submitting it to the Federal Centers for Medicare and Medicaid Services (CMS) for approval. Following approval from CMS, the Florida Legislature will review the reform plan before its first phase is implemented in Duval and Broward counties in spring 2006.

"The current fractured, fee-for-service system doesn't come close to meeting the needs of Florida's Medicaid participants," said AHCA Secretary Alan Levine. "By reforming Medicaid, we'll create a system that provides quality care to those who need it most and bring predictability to spending to ensure the program is sustainable over the long -term."

Medicaid has not undergone significant reform since its inception more than 30 years ago. A reformed Medicaid will bring predictability to state spending on Florida's rapidly growing $15 billion program. If Florida's Medicaid program continues to grow at its present rate, it will consume nearly 60 percent of the state's budget by 2015.

Guiding principles of the plan to transform Medicaid include:

* Moving To a Patient-Centered System

* Customizing benefit packages will allow health plans meet the unique needs of participants. Participants will be able to choose among a variety of benefit packages, and with the help of independent choice counselors, will choose the plan that best meets their needs.

* Transparency among plans will be critical in empowering consumers. All plans will be required to collect and report information such as consumer satisfaction, percentage of children who receive annual physicals and preventive dental care, and waiting times for customer assistance, among other measures.

* Medicaid participants will also be able to opt-out of Medicaid entirely and use their state-allocated Medicaid premium to participate in an employer-sponsored plan.

* By engaging in healthy behaviors, participants can earn credits for approved health related expenses like co-pays, over-the-counter medications or eyeglasses. These incentives will encourage participants to engage in healthy lifestyle choices - improving health outcomes and lowering acute care costs - while providing a means to access health items not covered by Medicaid.

Creating a Medicaid Marketplace:

* Under a reformed system, provider groups will have greatly improved flexibility in forming and designing benefit plans with strict oversight from the state. Providers will attract membership on the basis of their benefit package, innovative care, convenient networks, and optional services. The consumer satisfaction data collected by the state will drive quality of care and allow participants to make informed choices about the plan that best fits their needs.

* Each plan will be measured on quality, giving policymakers best practices to continually improve healthcare for Florida's Medicaid participants. With half of Florida's Medicaid population comprised by African American and Hispanic participants, this information is important to help close the gap of racial disparities.

* Market forces will reduce fraud in Medicaid. Because the current Medicaid system pays claims first and identifies fraud later, there is virtually no certain way to control fraud and abuse. Under proposed reforms, health plans have a financial incentive to aggressively guard against fraud. Plans will be required to report overpayments to the state and will be able to identify fraudulent providers within their networks.

For more information, and to read the Florida Medicaid waiver application in its entirety, please visit http://ahca.myflorida.com.