Mandatory Medicaid Contracting                

During the 2012 Legislative Session, there were attempts to make contracting with Medicaid managed care plans mandatory for hospitals.  Although not a specific bill under consideration by the Legislature, several amendments to Medicaid managed care legislation were offered this year.

The proposed amendments would have forced hospitals to contract, or forced the mandatory provision of hospital services through managed care companies. They also would have required specific payment provisions when these types of mandatory provisions are enforced.

In addition, several unsuccessful attempts were made to place language that prohibits free-market negotiations between hospitals and managed care companies in various pieces of legislation.

One version of this language stated: "Before the selection of managed care plans as specified in s. 409.966, each essential provider and each hospital that are necessary in order for a managed care plan to demonstrate an adequate network, as determined by the agency, are a part of that managed care plan's network for purposes of the provider's or hospital's application for enrollment or expansion in the Medicaid program. A managed care plan's payment under this section to an essential provider must be made in accordance with this section."

This language:

  • Violated "free market" principles championed by the Legislature;
  • Allowed any HMO corporation to be guaranteed access to hospital services;
  • Allowed any Medicaid HMO to automatically meet network adequacy standards;
  • Is contradictory to the regulatory relief efforts supported by Legislative Leadership;
  • Is a major barrier to open financial negotiations between two private parties; and
  • Raised constitutional questions related to the impairment on the obligation to contract.

FHA successfully opposed the inclusion of this language every time it was offered. Hospitals already contract with managed care plans, and a February 2012 FHA survey of nearly 200 hospitals revealed that 1,333 contracts between hospitals and Medicaid managed care plans were already signed. Another 128 contracts were in negotiation. Each region had twice as many plans under contract as the number of plans per region authorized under the 2011 statewide Medicaid managed care legislation (see map under Resources).