AHCA Goes Against Judge On Medicaid Contract; Appeal Looms

, Daily Business Review

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As the state moves forward with an overhaul of the Medicaid system, the Florida Agency for Health Care Administration is standing behind its decision to award a disputed contract to a managed-care plan that would serve low-income people in Miami-Dade and Monroe counties.

In an order released Monday, AHCA rejected an administrative law judge's recommendation that Prestige Health Choice LLC did not meet legal requirements to get the contract amid questions about the firm's ownership structure. Another firm that challenged the contract award, Care Access PSN, immediately said it would challenge the agency's decision at the 1st District Court of Appeal.

"The judge's (recommended) order was issued after he independently reviewed thousands of pages of testimony, documents, and depositions, as well as the live testimony presented at a hearing from the key participants in this matter," Care Access said in a prepared statement. "The rejection by the agency of this independent review of the clear legal and factual matters presented sets a bad precedent for the independent, nonpolitical review of such an important project for the Medicaid population in the state of Florida."

But in its decision, known as a final order, the Agency for Health Care Administration said Administrative Law Judge John Van Laningham incorrectly interpreted requirements that deal with a type of managed-care plan known as a "provider-service network." Florida's Medicaid overhaul will eventually lead to almost all beneficiaries enrolling in managed care, with most state contracts going to HMOs but some going to provider-service networks.

Prestige Health Choice was the only provider-service network chosen for a contract in Miami-Dade and Monroe. But Van Laningham found that it did not qualify as a provider-service network because health-care providers owned less than 50 percent of it.

AHCA, however, said that was wrong because Health Choice Network of Florida, Inc., a company that owns part of Prestige Health Choice, is a group of affiliated health-care providers, though the company itself is not a provider.

"The intent (of a section of state law) is that a majority of a PSN be provider-owned and controlled, regardless of how many providers or groups of affiliated providers hold the majority ownership and control," the agency said in the final order dated Friday. "In this regard, Prestige is clearly owned by a majority of providers and groups of affiliated providers, and these providers and groups of affiliated providers control the majority of the governing body of Prestige."

The dispute stems from AHCA's efforts to move forward with a Medicaid overhaul that lawmakers approved in 2011. Since August, seniors who need Medicaid long-term care have gradually moved into managed-care plans, and the Agency for Health Care Administration is preparing to start a similar transition for the broader Medicaid population.

AHCA has awarded contracts to varying numbers of managed-care plans in 11 regions of the state after competitive evaluation processes. For the broader Medicaid population, the agency has awarded contracts to 10 health plans in the region made up of Miami-Dade and Monroe counties.

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