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    Agency backs off on Medicaid penalty

    A company told to repay the state $7.5-million finds that is now subject to negotiation.


    © St. Petersburg Times, published March 9, 2001

    TALLAHASSEE -- In January, Florida's Agency for Health Care Administration got tough with a company running a Medicaid program for poor people with diabetes: The company wasn't saving enough money and would have to repay $7.5-million to the state.

    Three weeks later, the agency backed down.

    ACHA's chief Medicaid official, Bob Sharpe, acknowledged this week that he rescinded his decision about the $7.5-million after meeting with Larry Overton, lobbyist for Coordinated Care Solution.

    The company also hired as a consultant Doug Cook, a former ACHA secretary who had appointed Sharpe to his high-ranking Medicaid job. Cook said he had advised the company in its negotiations with ACHA but never spoke to agency officials.

    The tale of the diabetes contract is coming to light as state lawmakers grapple with a nearly $1-billion shortfall in the state Medicaid budget. As they look at painful cuts in health programs for poor people, lawmakers also are beginning to scrutinize ACHA, which oversees Medicaid.

    On Thursday, state Sen. Ron Silver, a North Miami Beach Democrat in charge of the Senate's health care budget committee, criticized the agency for failing to be aggressive in recouping Medicaid dollars in fraudulent or otherwise questionable contracts.

    Silver said the agency was being "too nice" at a time when the state desperately needs all the Medicaid money it can get to cover deficits dating back to 1999-2000, as well as unexpected Medicaid expenses next budget year. At stake are programs for poor pregnant women, children, the elderly and the disabled.

    State officials have attributed the Medicaid shortfall largely to the spiraling costs of prescription drugs and a leap in the number of poor children who have signed up for health insurance.

    But state records show that the deficits also stem, in part, from ACHA's inability to realize Medicaid savings directed by the Legislature over the past several years.

    One of the savings was supposed to be in disease management programs that seek to cut costs by closely monitoring patients with chronic diseases, such as diabetes. The idea is that if patients are trained to manage their conditions, they will be less likely to seek emergency room care and other expensive remedies.

    The Legislature directed ACHA to save $4.1-million in Medicaid dollars in 1997-98, and $39.4-million in 1998-99 by using disease management programs. So far, the agency has reported no savings in these programs.

    Sharpe said the programs took time to start. Coordinated Care Solutions, based in Coral Springs, didn't even enter into the diabetes contract until May 1999. The three-year, $25-million contract allowed ACHA to recoup money from the company if it didn't generate enough Medicaid savings.

    State records show that ACHA officials who monitored the diabetes program continued to find problems, including that the program wasn't reaching enough clients. In January, agency officials also determined the state should recoup $7.5-million because of inadequate savings.

    Coordinated Care disputes that amount. The company's executive vice president, Dr. Michael Montijo, said he believes the company may have saved the state between $15-million and $25-million. The program has been challenging because disease management is a new approach. "This is a pilot program and we're the guinea pigs," Montijo said. In addition, he said, huge increases in drug costs have affected the program's ability to produce savings.

    Sharpe said he has listened to the company's arguments, and his agency is trying to be fair in evaluating the company's performance and whether it should repay the state. The parties still are negotiating on the matter.

    Sharpe also said ACHA officials meet with lobbyists "all the time" because they are in Tallahassee and serve as liaisons for companies doing business with the state. "We are cordial to them like we are with everyone," Sharpe said. "But we fully believe we are making decisions on the merits of things, not on who comes in to represent companies."

    Coordinated Care lobbyist Larry Overton did not return a reporter's phone call Thursday.

    Cook, the former ACHA secretary, said Coordinated Care hired his consulting firm about a year ago for $2,500 a month. Cook was ACHA secretary at the time Coordinated Care bid on the diabetes contract, but he was no longer with the agency when the final contract was signed.

    Cook said his involvement as an adviser to Coordinated Care had nothing to do with ACHA's backing off the company. "I did not talk to anyone at the agency. I did not encourage the agency in any way," Cook said.

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