With HMOs waging a legal battle about new contracts, state employees will have to wait longer this fall to sign up for health-insurance benefits.
The Florida Department of Management Services on Wednesday said it pushed back the start of an open-enrollment insurance period from Sept. 26 to Nov. 7.
The move came as an administrative law judge gets ready to hear arguments next month about new contracts that could lead to three HMOs losing substantial chunks of their state-employee business.
UnitedHealthcare of Florida, Coventry Health Care of Florida and Florida Health Care Plan are challenging a Department of Management Services decision to only contract with one HMO in each county.
Meanwhile, two HMOs that would be winners in the new system — AvMed and Capital Health Plan — have joined the case to argue in support of the changes.
The losing firms say the state’s contracting process was flawed and that allowing only one HMO in each county will force tens of thousands of workers and retirees to switch health plans.
“It does not provide ‘best value’ to the state. … The (department) actions are clearly erroneous, contrary to competition, arbitrary or capricious,” Coventry said in its challenge in the state Division of Administrative Hearings.
But the Department of Management Services contends that the changes will lead to an estimated savings of $400 million over two years, in part because of competition for the contracts.
Capital Health Plan, which would have the HMO contract in seven North Florida counties loaded with state workers and retirees, defended the contracting process in a legal filing.
“The ultimate facts … are that CHP’s final offer provides by a wide margin the best value to the state in each county in CHP’s service area, as determined by the department reasonably and in good faith during a negotiation process,” the HMO said.
The Department of Management Services originally scheduled an open-enrollment period from Sept. 26 through Oct. 21. But the agency Wednesday postponed the period until Nov. 7 through Nov. 18 because of the legal case.
The changes, which are slated to take effect Jan. 1, apply only to employees enrolled in the HMO portion of the state insurance program. Employees enrolled in the state’s preferred-provider organization plan (PPO), which is administered by Blue Cross and Blue Shield of Florida, are not affected.
Currently, the state contracts with five HMOs. If the changes are upheld, employees and retirees in much of the state could see changes.
For example, United would go from providing coverage in 66 counties to 18. Similarly, Florida Health Care Plan would not cover state employees in the only two counties it serves — Volusia and Flagler.
Spokesman Kris Purcell said in an e-mail Wednesday that the department expects to use the PPO as a fallback for employees who face changing HMOs. If those employees don’t make the changes, they would go into the PPO to “ensure they have no lapse in coverage,” Purcell said.
AvMed would become the dominant HMO in the state plan, winning contracts to serve 38 counties, including major population centers such as Miami-Dade, Broward, Palm Beach, Duval, Hillsborough, Pinellas and Orange.
The administrative hearing is scheduled to start Sept. 12. UnitedHealthcare, Coventry and Florida Health Care Plan have already indicated in filings that they likely will take aim at AvMed, writes Jim Saunders of the News Service of Florida.
United and Florida Health Care Plan contend, at least in part, that AvMed does not have as large of a network of providers as they can offer to state employees. United also argues it can wring greater discounts out of providers because it is a larger insurer.