State moves quickly to resolve legal challenges surrounding Medicaid managed care

Florida Medicaid officials are moving quickly to resolve legal issues surrounding the state’s multibillion-dollar slate of Medicaid managed care contracts.

The Agency for Health Care Administration (AHCA) referred legal complaints filed by ImagineCare, AmeriHealth Caritas And Sentence to be filed with the state’s Division of Administrative Hearings (DOAH) on July 26, a few days before the statutory deadline.

No administrative judge has been assigned to any case.

Florida Administrative Law requires a hearing to be held within 30 days, meaning the trial must begin no later than August 26.

AHCA referred the cases to DOAH after Florida’s top economists questioned the start date for the recently announced Medicaid contracts. Medicaid officials had targeted a Sept. 1 start date for a multi-phase rollout and Jan. 1, 2025, as the date for statewide implementation.

The ongoing legal dispute is already posing a conundrum for economists tasked with forecasting the state’s financial outlook for the next three years.

Economists met last week to determine Medicaid spending for the current fiscal year, including the rates paid to Medicaid managed care plans. Because federal law requires that managed care plans receive actuarially sound rates, Florida has contracted with Milliman to analyze experience and set the rates.

Milliman actuaries presented state economists with two sets of draft rates to consider for the current 2024-25 fiscal year: one set of rates for the existing contracts and another for the new contracts. AHCA Assistant Secretary for Health Care Finance and Data Tom Wallace recommended combining the two rates, using the rates for the existing contracts from October through January and the new rates for the remainder of the year.

Amy BakerFlorida’s chief economist and a member of the Social Services Estimating Conference, was uncomfortable with the recommendation.

“I just don’t know if I’m comfortable with the fact that I have enough information — no one’s fault — about when this is going to be clear when we go live (with the new contracts),” Baker said. “We would have to assume that everything is going to be clear in a reasonable amount of time to prove that it’s true.”

Baker initially advised the economists to use the advance invitation to negotiate the full-year enrollment percentages (ITNs) and adjust them at their next meeting in the fall.

But Wallace said AHCA’s recommendation to use the pre-ITN rates through January was responsible. “We know it’s definitely going to have to happen here at some point. We just don’t know exactly when that is,” Wallace said.

Baker then recommended that economists use pre-ITN rates for 50% of the year and post-ITN rates for the rest of the year. And she pressed Wallace again on the potential impact of the challenges.

“Could it happen? Could there be a delay that affects all your contracts?” she asked.

Wallace responded: “I think it could potentially happen. I have no idea at this point where it’s going to land.”

The economists ultimately agreed with Baker’s recommendation to split the pre- and post-ITN rates equally, with both rates in effect for only six months.

In addition to being challenged in state administrative court, AHCA’s decisions to award Medicaid contracts are also being challenged in Leon County Circuit Court. And the number of litigants involved in those cases continues to grow.

The South Florida Community Care Network, operating as Community Care Plan (CCP), a motion was filed to intervene in the legal challenge on behalf of the state. CCP is owned by two hospital taxing districts in Broward County, one of which is run by Shane Strumthe former chief of staff to the governor. Ron DeSantis.

CCP is the second managed care plan to intervene on behalf of the state. Florida Community Care (FCC) filed a motion to intervene in The ImagineCare lawsuit to prevent the AHCA Secretary Jason Weida from executing new multi-year Medicaid managed care contracts until the underlying administrative complaint is resolved.

The lawsuit has been assigned to Leon County District Court Judge Angela Dempsey.

ImagineCare is a type of health plan known as a provider service network (PSN) and is a joint venture between Spark Pediatrics and CareSource. FCC and CCP are also PSNs.

Florida officially launched Medicaid re-tendering in April 2023 with the release of a massive ITN. AHCA released its first decision nearly a year later, announcing its intention to award contracts to FCC, Humana Medical Plan, Simply Healthcare Plans, CCP, and Sunshine State Health Plan.

Seven plans, including the FCC, had notified the state of their intention to challenge the April decision. Some are objecting because they were not awarded contracts in the regions they were fighting for, while others are protesting that they were left out entirely.

After months of negotiations with some of the plans, AHCA published a second decision in JulyFour of the seven plans dropped their legal objections, but three did not.

ImagineCare and Sentara hoped the state would offer them six-year contracts to provide Medicaid services to beneficiaries enrolled in Florida’s mandatory Medicaid managed care program. Florida requires most Medicaid enrollees, from cradle to grave, to enroll in a managed care program in order to receive their health benefits.

AmeriHealth Caritas already has a contract with the state to provide services, but no new contract has been offered.

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