Unexpected $75 million Medicaid bill adds to Florida’s budget challenges

Dec. 24--Florida lawmakers will start the new year wrestling with how to pay nearly $75 million for an unexpected Medicaid bill.

Florida's Agency for Healthcare Administration accidentally reimbursed managed care companies at a rate lower than contracted for certain elderly recipients when it rolled out the program three years ago.

"The mismatch affected less than 1% of the managed care population and was thus obscure and difficult to spot," wrote the agency's interim secretary, Justin Senior, in a letter to the affected health plans.

The agency caught the error near the end of the last legislative session during a meeting to determine Medicaid reimbursement rates.

The agency then informed the managed care companies that received the lower reimbursements of the total estimated amount the state owed them.

The final managed care underpayment bill, first reported by the Miami Herald, was closer to $370 million. This cost is shared between the state and federal governments. In the end, the state owed $148 million in total.

Medicaid is a nearly $26 billion joint state-federal program that provides health care and assisted-living care for Florida's poor.

Over the summer, the agency paid the state's share of its newfound debt to the managed care companies for that year: $73 million. Now lawmakers must find an additional $74.9 million in a budget that has more wants than money.

"It's $74 million less to spend on something else," said Sen. Jack Latvala, the Senate's appropriations chairman. The payment issue "is going to be on my first of January agenda," he added.

The state has to approve the appropriation request, and Latvala, R-Clearwater, said Florida will pay as long as the debt is correct.

"I think we as a state usually pay our bills," Latvala said. "It's a liability, but that's why we will discuss it in depth in our meeting. I just know it's something we have to deal with. ...

"There's not much of a surplus," Latvala said. "We need to find something to cut to fund it, basically."

During the Florida Senate's first health budget committee meeting this month, Chairman Anitere Flores said the chamber is going to spend a lot of time on the matter.

"That will be an issue that we will probably dedicate most of our session to, quite frankly," said Flores, R-Miami. "So, we are on it. It's a lot of money and we will want to get those answers, and we will."

During that meeting Sen. Kevin Rader, D-Delray Beach, said Medicaid managed care companies weren't just being underpaid, some were overpaid.

Rader was referring to a November report released by the Department of Health and Human Services' Office of Inspector General. That report says Florida had overpaid managed care providers $26 million from 2009 to 2014 for prepaid insurance provided to people who died during the coverage period.

AHCA's interim secretary, Justin Senior, said the state had recouped most of that money by 2016.

Sen. Kelli Stargel, vice chair of the Senate health budget committee, said in an interview the state likely would have to evaluate the system as a whole when it comes to recouping insurance money for dead people.

"I need to learn more about how the system works, but we need to look at the cost of scrutiny versus the cost of getting the recuperation of payments," said Stargel, R-Lakeland.

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