Public Payers News

Florida Hospitals Audited for Medicaid Payment Rate Limits

By Jacqueline DiChiara

- The Florida Agency for Health Care Administration (AHCA) will audit 31 hospitals sprawled throughout Florida to assess whether or not their Medicaid managed-care plan contracts are indeed compliant with state law. Liz Dudek, AHCA Secretary, urged healthcare insurers and hospitals in a July 17 letter to verify they did not push the boundaries regarding Medicaid payment rate limitations, set at 120 percent of a Medicaid fee schedule.

Medicaid managed care-plan

The 31 hospitals will be audited by the Office of Medicaid Program Integrity for either not responding to the request, or for not providing needed information by the set deadline.

Dudek confirms the agency has "grave concerns that hospital contractual arrangements may have ballooned to unreasonable proportions and higher than what is allowed by state law."

“In the fee for service environment, hospitals received the state-set Medicaid rate. Managed care has the ability to pay higher than what the state itself could pay, and historically has paid slightly higher than the posted Medicaid rate,” states Dudek. “In building the managed care rates for the 2015- 2016 rate year, the Agency believes using a contracting factor for hospitals of roughly 105% or less of the Medicaid rate is reasonable,” she adds, confirming the Agency in no way comprehends 120 percent as an acceptable average for hospital rates.

  • How to Curb Adverse Selection in the Individual Health Plan Market
  • Key Ways Payers Could Improve Medical Claims Management
  • CMS: New Medicare Part D Policies to Address Opioid Epidemic
  • Says Florida Governor, Rick Scott (R), in a written response to Dudek, “Let’s never forget that all Medicaid payments are paid for by the taxpayers of our state.” Governor Scott confirms the Statewide Medicaid Managed care program’s purpose is to provide high quality care to Medicaid recipients while utilizing taxpayer funds in an efficient manner. He additionally maintains that to protect Florida taxpayers from paying insurance companies and hospitals for rates that surpass those allowed via state law, agencies should three take necessary steps to ensure taxpayers are not overcharged because of contracts exceeding the legal Medicaid rate limit of 120 percent:

    • Dispatch the Office of Medicaid Program Integrity to audit all hospital and insurance company contracts that have not been certified as complying with state law as of August 1, 2015.
    • Inform non-responsive hospitals and insurance plans that contractual arrangements violating the 120 percent limitation in state law will be subject to an immediate corrective action plan. This plan will include the modification or termination of contracts found to be outside the law. This notification should include the serious warning that the termination of a contract with an insurance plan could make a hospital ineligible for Low Income Pool (LIP) funding or participation in the state’s Medicaid Managed Care program.
    • Make a public presentation at the August 12th meeting of the Healthcare and Hospital Commission to inform the public of every hospital and insurance plan that has failed to present information certifying their compliance with the legal Medicaid rate limit of 120 percent.

    The hospitals to be audited are: Cleveland Clinic Hospital, Baptist Hospital Physicians Regional Medical Center – Collier Boulevard, Physicians Regional Medical Center – Pine Ridge, Flagler Hospital, Venice Regional Bayfront Health, Bay Medical Center, Sacred Heart Health System, Bayfront Health Punta Gorda, Calhoun-Liberty Hospital, Campbellton-Graceville Hospital, Doctor's Memorial Hospital, Healthmark Regional Medical Center, Kindred Hospital in Melbourne, Ocala, The Palm Beaches, Bay Area – St. Petersburg, Bay Area – Tampa, Central Tampa, North Florida, South Florida, Coral Gables, South Florida – Ft. Lauderdale, South Florida – Hollywood, Martin Hospital South, Martin Medical Center, Tradition Medical Center, Lake Butler Hospital, Select Specialty Hospital in Orlando (North), Palm Beach, and Panama City, Shands Live Oak Regional Medical Center, and West Gables Rehabilitation Hospital.