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Medical care plan a failure, audit says


© St. Petersburg Times, published May 23, 2001

TALLAHASSEE -- Florida launched a program in 1997 to save more than $100-million in taxpayer dollars by better managing medical care for poor people with chronic diseases.

TALLAHASSEE -- Florida launched a program in 1997 to save more than $100-million in taxpayer dollars by better managing medical care for poor people with chronic diseases.

Four years later, a new state audit suggests that the program has been a flop.

So far, the "disease management initiative" by the Agency for Health Care Administration has cost at least $24.1-million, but it's not clear what, if any, savings have resulted.

In addition, private companies have been getting paid for thousands of Medicaid clients who never received services. The companies were given lists of eligible Medicaid clients, but were unable to locate many of them. The problem: The state paid fees upfront to cover all the eligible patients.

Only 19 percent of an estimated 6,000 people eligible for an HIV/AIDS disease management program actually received services, according to the review by the Legislature's Office of Program Policy Analysis and Government Accountability (OPPAGA). Only 47 percent of eligible clients were served in a hemophilia program, and 58 percent in a diabetes program. An asthma program, now discontinued, only served 6 percent of the 30,000 eligible clients, but that contract did not involve upfront fees.

The programs created by the Legislature are designed to cut Medicaid costs by closely monitoring patients with chronic diseases. 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.

"There are values to these programs. We have not only systematic data, but anecdotal information about how people's lives have improved. They are better off," said Bob Sharpe, who oversees Medicaid at the Agency for Health Care Administration.

Overall, OPPAGA noted, the agency has failed to identify and address significant problems with the programs, or achieve an expected $112.7-million in savings over the past four years. The lack of savings "likely contributed" to the massive Medicaid deficit that lawmakers grappled with this past legislative session.

Sharpe said disease management is a new concept for Medicaid, and the Legislature should not have expected immediate savings.

"We went in as a demonstration. It's a new thing, and there is some risk associated with it," Sharpe said. "We have the most ambitious program of any state Medicaid program ... . We had to set the pace for other states."

The St. Petersburg Times reported in March that Sharpe backed off from demanding $7.5-million from Coordinated Care Solutions, the Coral Springs company in charge of the diabetes disease management program.

The program wasn't saving enough, and the state was allowed to ask for money back under the contract. Sharpe rescinded his decision about repayment after meeting with Larry Overton, a lobbyist for Coordinated Care who used to work with Sharpe years ago at the state's social services agency.

OPPAGA was critical of Sharpe's action, blaming it on the Agency for Health Care Administration's failure to establish an explicit method for determining cost savings in the disease management programs. "This makes the agency vulnerable to disputes over whether or not savings are achieved."

The agency said that after further research, it determined that Coordinated Care still owed the state $7.57-million. An April 13 letter was sent to Virginia Dollard, the president of Coordinated Care, demanding the money within 90 days. Dollard did not return a reporter's phone call Tuesday.

Sharpe said the company has not repaid the money and the matter is still under negotiation. Coordinated Care has been notified that the state will not renew the diabetes contract, Sharpe said.

The Legislature envisioned a disease management program that would encompass patients with nine diseases: asthma, diabetes, HIV/AIDS, hemophilia, hypertension, cancer, congestive heart failure, end-state renal disease and sickle cell anemia.

As of March, programs are in place for only five of the diseases, and two do not cover the entire state, OPPAGA reported.

OPPAGA suggested redesigning the programs and changing the way the state advances fees to companies -- to more accurately relect the number of clients receiving services.

Sharpe said his agency is demanding that companies guarantee a particular amount of savings to the state. In addition, the agency is trying to better target the Medicaid patients who will be served, "so our investment is not as great, but our potential for savings is the same."

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