The Florida legislature passed a fairly massive overhaul of the Medicaid law in Florida last Friday just before adjourning this year’s legislative session.  The Florida Senate President called it “a momentous moment and the most comprehensive reform ever enacted to the state’s Medicaid program.”  You can see his press release here.  House Bills 7109 and 7107contain the new revised Medicaid statutes.

While there are many, quite significant, changes in the overall Medicaid programs offered by the State of Florida, and no doubt the impact of many of the changes will not be known for some time, one important technique for long term care planning was not directly impacted.  The provisions in earlier drafts of the legislation that could have potentially severely restricted the use of personal care contracts were removed.  Neither House bill 7107 nor 7109 contains any specific language regarding personal care contracts (or spousal refusal).

Newly revised Florida Statutes, Section 409.902, provides that the Agency for Healthcare Administration shall be the agency with the sole authority to establish eligibility criteria to qualify for Medicaid benefits.  At least until there has been an administrative determination regarding any changes that need be made to the use of personal care contracts, it appears that the use of such contracts will remain status quo.

However, the new statutes do provide that the long-term care portion of the Medicaid program will also now be included in the managed care provider network that is being established for all Medicaid programs.  For an individual to be eligible for Medicaid, that individual must enroll in one of the managed care provider networks.  Each managed care provider network will then negotiate with the various nursing homes to provide for the nursing home care needs of it elderly enrollees.  It is unclear from the new law whether all managed care provider networks with contract with all nursing homes, or whether it will be necessary for the individual to select a nursing home first, and then enroll in the managed care program, or select a managed care program and then be admitted to a nursing home that is a part of that managed care network. Section 409.983(6), Florida Statutes.

Additionally, there apparently will be differences in the actual payments made to nursing homes depending on the “level of care” needed by each individual receiving Medicaid benefits.  The Agency for Health Care Administration is directed in the new legislation to establish various levels of care, and assign a level of care to each individual who is eligible for Medicaid long-term care benefits.  The managed care provider network is to then negotiate with each individual nursing home to establish the rate for each level of care, and each individual based on that level of care.  The legislation further provides that the reimbursement to the managed care provider is to be adjusted to reflect actual expenses paid to the nursing home by the managed care provider.  Section 409.985, Florida Statutes.
To make all of this work “efficiently,” the legislation requires that a “long-term care managed care technical advisory workgroup” be established not later than August 1, 2011. The charge of this workgroup is to assist in developing (a) the method of determining Medicaid eligibility for individuals needing long-term care, (b) the requirements for provider payments to nursing homes, (c) the method for managing Medicare coinsurance crossover claims; (d) uniform requirements for claims submissions and payments, and (e) the process for enrollment of and payment for individuals pending determination of Medicaid eligibility. Section 409.9841, Florida Statutes.  The effective date of the statute is July 1, 2011.

The long-term care technical advisory committee is to be comprised of “representatives of providers and plans who could potnetially participate in long-term care managed care.”  The members of this group are to serve without compensation, but receive reimbusrement for per diem and travel expenses. 

It will be interesting, from an academic perspective, to see how all of this will work in practice.  The transition from the current reimbursement system to this new system is likely not to be smooth.  The potential for individuals needing long-term care getting lost in the system is frightening. 

On the surface it may seem appropriate to compensate nursing homes based on the “level of care” needed by each individual.  Depending on how the levels of care are defined, there may in fact be cost savings for the State, which obviously is the objective of this wholesale change in structure.  On the other hand, the costs of nursing home care continues to grow faster than the rate of inflation, which could become problematical for determining appropriate reimbursement rates based on individual level of care needs. Putting members of the managed care providers on the task force to help establish the method of determining eligibility and rates and methods of reimbsurement, to serve without compensation, suggests that there may not be a lot of savings for the State to result from this statutory overhaul.

Stay tuned.  We’ll either exalt the legislature for fixing the program – or the elderly in the State of Florida will suffer the consequences of an ill conceived expansion of an already bloated bureaucracy.

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