The Florida Current reports that Florida will be receiving $1 billion in Low-Income Pool money after negotiations between federal and state officials.

The news signals the state has cleared one of the two major hurdles it has faced in expanding its Medicaid privatization plans statewide.

According to the Current:

The lone obstacle between the state and federal government in Medicaid 1115 waiver negotiations appears to have been settled as state officials announced on Tuesday that Florida will continue to receive $1 billion to fund health care for the poor, uninsured and underinsured.

Medicaid Deputy Director of Finance Phil Williams told a hospital panel on Tuesday that the state will continue to receive $1 billion in Low Income Pool money for three years. But the news wasn’t all good as Williams discussed with the hospital-dominated board some of the new reporting requirements and benchmarks for primary-care funding.

The Medicaid 1115 waiver makes possible a mandatory managed-care program in five Florida counties. But Florida has been negotiating to extend the program for more than a year. The fate of the low income pool has been one of the bigger stumbling blocks.

The waiver is important because to launch its new statewide mandatory Medicaid managed-care program the state needs the waiver. Because the existing five-county pilot program and the new statewide program are not identical, the 1115 waiver will need to be amended. Florida already has sent the amendments to the federal government to consider even though the underlying waiver still is pending.

The federal government has also expressed concerns over an absent medical loss ratio in Florida’s Medicaid Reform Pilot. The Centers for Medicare and Medicaid Services have asked for a medical loss ratio in the state’s plans to expand the pilots statewide. This “85/15″ requirement mandates that providers spend 85 percent on services and 15 percent on administration. The standard is one of the provisions in the federal health care reform law setting new rules for state Medicaid plans. The federal government plans to fund the expansion of state Medicaid plans to include more people who are currently uninsured.

When this issue came up a couple of years ago, Gregg Mellow of the Florida Center for Fiscal and Economic Policy said medical loss ratio rules were a good way to provide accountability, WFSU reported:

There have been concerns over the lack of accountability in the pilot project throughout its five years. And the concerns that they’ve had have not been resolved. I think that’s universally recognized. [The federal Centers for Medicare and Medicaid Services] has said look, you’re getting a waiver, all these federal rules relaxed, so in exchange for that we need some basic assurance that the power given to managed care plans is not going to be abused.

A.M. Best Company reports that “Florida wants to continue existing state MLR rules that enforce a 65 percent standard for health insurers and 70 percent for health maintenance organizations until 2014.”

Florida CHAIN (Community Health Action Information Network), a patient advocacy group, recently asked the feds to not grant insurance companies in Florida exemption from profit caps mandated by federal law. In a letter, the group asked the U.S. Department of Health and Human Services “to reject a request by Florida’s Insurance Commissioner to grant insurance companies a reprieve from new Affordable Care Act requirements intended to ensure that consumers get value for the health insurance premiums they pay.”

“The comment period for Florida’s application expired Oct. 27. CMS is due to make a determination within 30 days, a period regulations allow the U.S. Health and Human Services Secretary Kathleen Sebelius to extend by up to another 30 days,” Best Company reports.

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