Medicaid managed care plans popped with more than $33M in liquidated damages last year

The Florida agency that oversees Medicaid imposed more than $33 million in sanctions against the health plans responsible for providing coverage in the past fiscal year.

Data culled by the Agency for Health Care Administration (AHCA) shows that as of June 28, the agency took 288 final actions during the fiscal year that started on July 1, 2023. All but one of those final actions resulted in liquidated damages, totaling $33.2 million.

Even though Medicaid is financed through state and federal tax dollars, the bulk of the program is run through privately held companies that have contracts with the state to offer Medicaid coverage.

The AHCA data shows that Sunshine Health had the most final actions taken against it with 36, followed by UnitedHealthcare with 35 and Humana Medical Plan with 33.

But AHCA regulators levied nearly $13.8 million in liquidated damages against WHO, far more than the $2.29 in damages levied against United Healthcare and $2.3 million levied against Humana Medical Plan.

AHCA also sanctioned Simply Healthcare in Fiscal Year 2023-24. The Medicaid managed care plan paid $2,500 for the sanction according to the agency compliance dashboard.

According to the AHCA website the vast majority of the liquidated damages, or 93%, are due to one final action stemming from a “desk review.”

Every contracted health plan had liquidated damages levied against them in FY 2023-24 as a result of desk reviews according to the website. Indeed, desk reviews accounted for the majority of the liquidated damages.

The number of final actions taken against the health plans in FY 2023-24 increased by 36 from the previous fiscal year. The amount in liquidated damages in FY 2023-24 increased by more than $30 million compared to the previous fiscal year.

The data is not final and includes administrative actions and sanctions through June 28.

The state fiscal year ended on June 30.

AHCA is in the midst of its statewide Medicaid managed care procurement and the existing contracts are expected to come to an end at the end of the year. Eleven managed care plans responded to the state’s invitation to negotiate new Medicaid managed care contracts. AHCA announced in April its intent to sign contracts with Florida Community Care, Humana Medical Plan, Simply Healthcare Plans, Sunshine State Health Plan and South Florida Community Care Network.

Several plans — Aetna Better Health of Florida; AmeriHealth Caritas Florida; Florida Community Care; ImagineCare; Molina Healthcare of Florida; Sentara Care Alliance; South Florida Community Care Network, d/b/a Community Care Plan; and UnitedHealthcare of Florida — filed notices of intent to challenge the Medicaid Managed Care ITN decision, according to AHCA’s office of public information.

AHCA has not made the challenges available for public review. But none of the challenges have been officially filed in state administrative court, an indication that the agency is continuing to try to negotiate settlements with the managed care plans that have threatened legal action.

AHCA wants the new plans to take effect Jan. 1, 2025.

Meanwhile, AHCA’s compliance dashboard shows that the state has taken 1,213 final actions against the health plans during the six years the current contracts have been in effect. All but three of those final actions resulted in liquidated damages. Just $9 million in sanctions were levied.

Unlike sanctions, liquidated damages are not intended to be punitive in nature but instead are estimates of the state’s projected financial loss and damage resulting from non-performance.