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Hefty price tag added to long-term care carve out

The Florida Health Care Association has made carving out nursing homes from the Statewide Medicaid Managed Care (SMMC) program their top priority, touting its ability to save the state money.

However, a new roadblock may have just made that task infinitely more challenging.

The Agency for Health Care Administration (AHCA) recently released an agency bill analysis on Senate Bill 682. The analysis indicated that a carve out of long-term care would come with a hefty price tag — an additional $284 million for FY 2014-2015, $432 million in FY 2015-2016.

The estimated “ongoing cost avoidance” would be $200 million annually.

Specifically, the analysis says that the agency analyzed the potential cost of carving out the nursing facility component from the long-term care (LTC) program utilizing the current managed care population’s characteristics. It modeled the costs of that population if the nursing facility versus community distribution was the same as before the legislature moved Medicaid recipients into the SMMC program.

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The finding was that under the current program more recipients were transitioned into the community that would not have occurred under the prior program structure, resulting in the cost savings identified.

Translation: Because Florida health plans are doing a better job at care coordination, they are more successful at transferring members into home and community-based care than the old LTC model was where recipients mostly resided in nursing homes, the state is saving money, and any move back to the old model would come at a cost.

“The Health Plans are doing what the Florida Legislature envisioned when they moved Medicaid recipients, including those in long-term care, into the SMMC program,” said Audrey Brown of the Florida Association of Health Plans.

“The fundamental strategy was to allow Florida’s health plans to coordinate long-term care for our state’s most vulnerable and frail Medicaid beneficiaries and to reduce reliance on nursing homes and increase the utilization of appropriate community-based alternatives,” Brown added. “Simultaneously, this strategy allowed for expanded, meaningful benefits to beneficiaries that the previous fee-for-service Medicaid program did not offer.”

Brown noted the program delivers the right amount and type of care to address individual needs and that satisfaction rates from members in the LTC program were high.

“The program is now delivered through more cost-efficient, home-based care services, which not only offers a less restrictive setting for plan members,” she concluded, “but has also resulted in more than $400 million in cost savings.”

With the House still staunchly lined up behind the value of the SMMC program and a new revelation of this significant fiscal impact — usually a poison pill for legislation — it is likely that Florida’s health plans will come out on top this year and live to fight this, and other attempts at carve-outs, another day.

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