Kaiser Daily Health Policy Report highlights recent Medicaid news in six states

Sep 1 2008

Summaries of recent news about Medicaid programs in Florida, Georgia, Massachusetts, Mississippi, South Carolina and West Virginia appear below.

Florida

Three insurance companies that cover 60% of people enrolled in Florida "Medicaid Reform" plans have said they will leave the project and have asked to be assigned no new members, a move suspected to be a result of reductions in Medicaid payments to the plans, Florida Health News reports. The reform plan, which began in 2006 and operates in five counties, requires that most non-institutionalized Medicaid beneficiaries be enrolled in private plans carrying the risk of providing their care.

Letters from Amerigroup Florida, UnitedHealthcare of Florida and WellCare Health Plans' HealthEase of Florida and WellCare of Florida did not indicate why they chose to leave the program, but Amerigroup spokesperson Kate Jenkins cited the 5% reduction in Medicaid payments scheduled for Sept. 1 as the reason. She said, "We understand Florida has budget issues," adding, "We want to work with them. But the hard fact is, it will lower our revenues at a time when health care costs are going up across the board" (Gentry/Jordan Sexton, Florida Health News, 8/27).

UnitedHealthcare spokesperson Steve Matthews said, "What it comes down to is a question of revenue and expenses" (LaMendola, South Florida Sun-Sentinel, 8/28). Florida Community Health Action Information Network Executive Director Laura Goodhue said, "Medicaid consumers, evaluators and advocates have been saying all along that the program isn't living up to its promise, and now it appears that the private market is agreeing" (Florida Health News, 8/27).

State officials did not indicate how beneficiaries enrolled in these plans will be covered after the plans stop participating in the program on Dec. 1. Medicaid officials with the Florida Agency on Health Care Administration will meet on Thursday to discuss options, according to spokesperson Fernando Serna (Galnor, Florida Times-Union, 8/28). Agency spokesperson Doc Kokol said Medicaid officials are "confident" that they will be able to continue coverage for the more than 100,000 beneficiaries affected by the pending withdrawal of the three companies from the program (Gentry/Jordan Sexton, Florida Health News, 8/28).

Georgia

Georgia Medicaid and PeachCare beneficiaries should not be affected by spending cuts aimed at closing a $1.6 billion budget gap for the current fiscal year, according to spending recommendations adopted Thursday by state health officials, the AP/Augusta Chronicle reports. However, hospitals and health care providers likely will be affected by a delay in a planned Medicaid rate increase. PeachCare is the state's version of SCHIP (Augusta Chronicle, 8/29). Overall, the plan would cut Medicaid funding by 5%, which includes delaying a planned provider payment increase (Macon Telegraph, 8/29).

State officials also are recommending that the state take advantage of a federal rule change and implement an additional fee on commercial insurers that operate managed care plans. State health commissioner Rhonda Meadows said benefits and enrollment for PeachCare would have to be frozen without the fee expansion. The fee currently is charged only to Medicaid managed care plans and generates about $90 million in annual revenue. The expansion is expected to face opposition from the state insurance lobby (AP/Augusta Chronicle, 8/29).

Massachusetts

The administration of Gov. Deval Patrick (D) on Friday announced that the federal government has granted Massachusetts a fifth Medicaid waiver extension in negotiations that aim to continue the state's health insurance law, the AP/Boston Globe reports. The waiver will be in effect until Sept. 8. According to the AP/Globe, Massachusetts needs the $385 million annual waiver to continue using federal funds as it shifts coverage from no-cost emergency care for uninsured residents to its private-public coverage system for all workers (AP/Boston Globe, 8/22).

Mississippi

A proposal by Gov. Haley Barbour (R) to increase hospital taxes to bridge a $90 million funding gap in the state Medicaid budget could force hospitals in the state to close, reduce services or eliminate staff positions, according to hospital officials who spoke Tuesday during a public comment session on the plan, the Jackson Clarion-Ledger reports. The plan is scheduled to take effect Monday. In addition to the tax increase, Barbour has proposed cutting state Medicaid reimbursement rates and replacing those cut with federal funds.

A group of 14 state Senate Democrats on Tuesday filed court documents in Hinds County challenging the proposal. In July, Judge William Singletary ruled that only the state Legislature has the authority to set taxes or fees paid by hospitals. State Rep. David Baria (D) wrote, "The circumstance that the legislative process has not yet produced full funding, or that the governor's preference in the method of funding has been frustrated in the Legislature, does not grant the governor constitutional license to bypass the Legislature and impose his tax plan by executive degree" (Chandler, Jackson Clarion-Ledger, 8/26).

Attorneys representing several hospitals opposed to the tax plan at a hearing on Wednesday said that the proposal is similar to a plan Barbour tried to pass in 2006, which a judge rejected. A ruling on the case was expected on Thursday (Washington Times, 8/28).

South Carolina

The state's Medicaid program plans to stop reimbursing providers for medical errors, the Columbia State reports. Before the change can occur, state officials must resolve some technical issues, according to state Health and Human Services Department spokesperson Jeff Stensland. Rick Foster of the South Carolina Hospital Association said the group already has adopted principles encouraging hospitals not to bill for certain errors (Higgins/Hinshaw, Columbia State, 8/23).

West Virginia

Nearly 60% of West Virginia Medicaid beneficiaries do not know whether they are enrolled in the state's basic Medicaid plan or the enhanced version, according to a survey released Tuesday, the Charleston Gazette reports. The Direct Action Welfare Group, which conducted the survey, said Medicaid beneficiaries do not understand recent changes to the Mountain Health Choices program, which allows residents to receive "enhanced" benefits if they visit a doctor and sign a "personal responsibility" pledge. The basic plan has fewer benefits than traditional Medicaid.

According to the survey, nearly 50% of parents of children enrolled in Medicaid do not know which level of coverage their children have. Eighty percent of the program's beneficiaries are children. In addition, the survey found that two-thirds of state Medicaid beneficiaries said they have not received a letter informing them of their coverage status (Eyre, Charleston Gazette, 8/27).

The survey is available online.