Life and politics from the Sunshine State's best city

Florida Medicaid HMOs having trouble meeting state financial solvency requirements

in Statewide/Top Headlines by

While hospitals’ financials have been under the microscope during the Regular and Special Legislative Sessions, another player in Florida’s Medicaid delivery system — managed-care plans — have escaped much of the scrutiny.

But a report of the health plans shows that the plans lost a cumulative $542.9 million in 2014 in their Medicaid line of business. And business didn’t improve in the first quarter of 2015.

Two of the 13 HMOs that provide health care to Medicaid patients in Florida’s Statewide Mandatory Managed Medical Assistance program failed to meet minimum net worth requirements for the first part of 2015 and they now operate under consent agreements with the state.

The Florida Office of Insurance Regulation has signed consent agreements with WellCare of Florida and Molina Healthcare of Florida that require each plan’s parent company to commit capital infusions as necessary so the plans can meet the state’s minimum surplus requirements. The plans also must meet additional monthly reporting requirements.

Neither plan is prevented from enrolling new Medicaid patients.

Insurance Commissioner Kevin McCarty signed the orders as the Medicaid managed-care plans wrestle with the Agency for Health Care Administration over the rates they will be paid to provide healthcare services to the Medicaid population during the second year of the mandatory managed-care program.

The WellCare of Florida consent order was signed June 3 after the plan failed to meet the state’s minimum surplus requirements for the first quarter of 2015. According to the agreement the plan was supposed to maintain a minimum surplus of $68.8 million. WellCare of Florida fell below the requirement with a surplus of just $29.7 million.

WellCare of Florida is owned by WellCare Health Plans, a Delaware company. The parent company on May 15 tried to infuse nearly $40 million into the Florida-based plan but the Office of Insurance Regulation didn’t allow it because it was after reporting deadlines. Instead, the office entered into the consent agreement that requires the parent company provide the Florida affiliate money “at all times” to ensure it meets minimum financial requirements. The agreement also requires WellCare of Florida to file monthly financial statements with the state.

The parent company infused the money into the plan after the signed consent agreement.

“We produced additional financial statements as of April 30, 2015, which show compliance with statutory surplus requirements,” WellCare senior director of external communication Crystal Warwell Walker said in a statement. “We continue to coordinate quality care for more than 900,000 people in the state of Florida.”

Walker attributed WellCare’s financial troubles to the Affordable Care Act and a requirement that the “provider fee” HMOs are levied be expensed in its entirety in the first quarter.

The Office of Insurance Regulation signed a similar agreement with Molina HealthCare of Florida, whose parent company is Molina Health Care Inc.

Molina had gotten nearly $60 million in contributions from its parent company as of Dec. 31, 2014, to meet minimum financial requirements throughout the year, the consent order shows. In February, the parent company earmarked another $9 million to cover 2014 year-end requirements but appropriated it after reporting deadlines, which isn’t allowed. The consent agreement requires the parent company to ensure the solvency of the subsidiary and also for the company to file monthly reports with the OIR. Unlike WellCare, which is for a set number of months, Molina’s requirement under the consent order is open ended.

Office of Insurance Regulation Deputy Chief of Staff Monte Stevens said the office met with legislative staff as well as staff from the Agency for Health Care Administration and the executive office of the governor to discuss the state’s financial solvency requirements for HMOs and to share their financial performance.

The managed-care plans pushed for $400 million in money for the rates they are paid to care for the Medicaid enrollees in the statewide mandatory Medicaid managed-care program. The Legislature did not put any additional money into the budget that will be voted on Friday.

Agency for Health Care Administration Secretary Liz Dudek told the HMOs in a letter that the rate increases weren’t necessary and, if granted, would nearly wipe out the 5 percent savings the state wanted to achieve by placing Medicaid enrollees into managed-care plans.

Latest from Statewide

Go to Top