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By KAREN PIHL-CAREY
HHBR Staff Writer
A Medicaid pilot project in Florida may start a new wave of health plans that focus on keeping the frail elderly in home care and outside of nursing homes.
Insurers that participate in the project, which is among the first of its kind, are paid 92% of the standard Medicaid fee-for-service reimbursement, as well as 76% of what Medicaid pays for a nursing home stay for each member enrolled. The insurers receive the money whether or not the member is staying in the nursing home, giving them incentive to care for the person through less expensive home care.
The Florida Department of Elder Affairs (Tallahassee) has signed on three insurers to participate in the project that the federal government approved in 1997. It has taken almost two years for the state to negotiate a mutually beneficial plan with insurers. United Healthcare of Florida, a division of UnitedHealth Group (Minneapolis), joined the project in December and has since enrolled about 130 elderly people in the Orlando area. The department earlier this month enlisted two more HMOs Beacon Health Plans (Coral Gables, FL) and Physicians Healthcare Plans (Tampa, FL) which will begin enrolling members next month or in September, pending contract approval from the Health Care Financing Administration (Baltimore).
The goal of the project is to allow elderly people to live at home as long as possible, while saving millions of Medicaid dollars being spent on nursing home care. The insurers will lose money if they have to place someone in a nursing home, but they will make a profit with many members kept in home care. The state wants 800 seniors in the three plans by summer of 2000. Of those 800, no more than 10% should be in nursing homes.
"It is a very measured gamble," Physicians Healthcare CEO Michael Fernandez told the Wall Street Journal. "If it was 20,000 seniors, we wouldn’t do it. Nursing homes are an unnecessary warehouse for many of our elderly. We believe a higher level of care can be provided at a lower cost."
The annual Medicaid budget for the three plans is $22 million. The state initially offered the insurers 67% of nursing home expenses, but it had to raise that offer in order to get the project started.
Out of the 130 elderly people enrolled in United Healthcare’s plan, only a few have been placed in nursing homes. State caseworkers intend to visit members of all three plans to make sure they are people at risk of going to a nursing home. The project is not for the healthy senior trying to plan for the future, but for the truly frail. Eligible members must also be enrolled in Medicare and Medicaid.
Florida’s nursing home costs have risen from $543 million to more than $1.3 billion over the last decade, and the number of low-income, disabled elderly in the state will grow 42.5% over the next decade, reported the Journal.