Medicaid Managed Care

Nearly seven years ago, the state of Florida embarked on an experiment in managed health care by placing Medicaid recipients in five Florida counties into different types of managed care plans. The University of Florida and Shands Jacksonville participated in this experiment by creating and operating a managed care plan in Jacksonville called First Coast Advantage (FCA). Today, FCA provides Medicaid benefits to nearly 65,000 members in four of these five counties.

I am pleased to report that on March 14, the Agency for Health Care Administration (AHCA) granted approval to The University of Florida and Shands to initiate a Medicaid provider service network in Alachua, Marion, Bradford, Union and Columbia counties beginning May 2012. The name of our managed care organization is First Coast Advantage-Central.

The term “managed care” is quite broad, but in general it refers to a method of health care delivery and finance in which the focus is on the continuum of care for a population, rather than on individual episodes of care. It attempts to improve the quality of health care while containing cost. In recent years, under the fee-for-service system, total cost has increased due to increased volume of health care services as opposed to an increased price per unit of service. So despite the fact that reimbursement for many Medicaid services has gone down, total expenditure has gone up.

Managed care can apply to different population groups. In Medicare, for example, “accountable care organizations” are being touted as a type of managed care plan that may be preferable to the current fee-for-service system. In commercial health plans, “health maintenance organizations” often are structured as managed care plans. And in Medicaid, the results of the state’s Medicaid managed care experiment led Florida to create a Medicaid system of care based on managed care. Effective October 2014, all Medicaid members (with limited exception) will be required to enroll in a managed care plan throughout the state. The creation of our managed care plan for Medicaid patients in our region—First Coast Advantage-Central—is the mechanism we have chosen to prepare for this statewide transition in 2014.

Managing health care for a population—whether they be a group of Medicaid patients, a group of children with disabilities, a cohort of Medicare patients, or employees who work at UF&Shands—first and foremost requires keeping people healthy. In support of this goal, the incentives under managed care are, in a sense, the opposite of the traditional fee-for-service model. Under fee-for-service, the incentive is to provide more services. The higher the volume of services provided, the greater the payments to physicians and hospitals by a third party (the patient and his or her insurance or government health plan). Under managed care such as FCA and FCA-Central, however, the managed care organization receives its revenues up front on a per-member basis, so the incentive is to create a system that improves the health of each individual and the community by preventing illness altogether, and by diagnosing illness early so that treatment is straightforward and more cost effective than it would be later in the course of disease. When care of acute and chronic illness is needed, the goal is to deliver comprehensive,team-based services that are based on evidence of efficacy and cost-effectiveness, and to maintain post-treatment communication in a manner that reduces relapse and re-admission.

Implementation of FCA and design of FCA-Central has been led by Michael Lawton, Vice President for managed care, and a talented group of individuals with backgrounds in managed care strategy and operations, nursing, compliance, finance, care management and customer service. Our aim is to ensure that the right care is provided at the right time, in the right place. Through management of these Medicaid populations on behalf of the state of Florida, the faculty practice plan will be able to use its collective knowledge and skills to provide better care to patients, access federal funding that is not available through traditional HMOs, and allow our organization to share in the benefit from improvements in quality and service.

First Coast Advantage-Central builds on the managed care expertise within our system. Together with First Coast Advantage in Jacksonville, the University of Florida and Shands managed care services are fast becoming a vital part of the communities we serve and an integral part of our health system that will help us attain our vision and achieve success.

Please watch for more information as we continue to grow this very important service.

Forward Together,

David S. Guzick, M.D., Ph.D. Senior Vice President, Health Affairs President,UF&Shands Health System