Florida’s Medicaid dilemma: navigating contract negotiations amidst healthcare giants’ legal storm

by | Jan 31, 2024



The state of Florida faces mounting pressure to adequately execute its Medicaid managed care re-procurement process, particularly as it involves negotiations with Sentara Healthcare and Centene, a pair of companies currently embroiled in legal controversies.


Florida’s Agency for Health Care Administration (AHCA) is engaged in the process of re-procuring Medicaid managed care contracts, a routine procedure that occurs every six years and is essential for the continued operation of the state’s Medicaid program. With decisions expected by mid-February, however, this year’s process is transpiring under heightened scrutiny due to controversies surrounding some of the major healthcare providers vying for lucrative contracts.

The re-procurement process, which involves contracts worth billions of dollars, determines which healthcare providers will manage Medicaid services for the state. This process is not only about selecting providers but also about ensuring the integrity and efficiency of the Medicaid system, which serves millions of Floridians.

“Accountability and oversight will be key to this process, especially since our state seems to be mired in Medicaid issues,” wrote Florida Hispanic Chamber of Commerce President Julio Fuentes in an op-ed for the Palm Beach Post.

Amidst negotiations, the Florida House of Representatives is attempting to address accountability issues in Medicaid managed care with a proposal of its own, HB 783. The legislation, if adopted, would mandate regular performance reporting by Medicaid managed care plans to AHCA, aiming to increase operational transparency and accountability.

Notably, the proposed reforms coincide with the state’s effort to reappropriation process, and while state Medicaid experts are pouring over applications from a wide range of providers to determine who will receive the contracts, several of those providers are carrying significant baggage.

Sentara Healthcare, a major healthcare organization and potential recipient of a state contract, is under federal investigation for allegedly making false statements related to reimbursement rates under the Affordable Care Act in Virginia. The investigation focuses on payments estimated to be around $665 million, raising concerns about the company’s practices and suitability as a Medicaid provider in Florida.

In 2018, Virginia’s health insurance market saw substantial rate increases by Optima Health — a subsidiary of Sentara — and Anthem, two major insurers, influenced by uncertainties in federal healthcare policies. Optima Health, particularly, increased its rates by 81 percent, a move that sparked public criticism and the formation of consumer advocacy groups.

In response to changing market conditions and competitor rates, Optima later sought to adjust its rates, but this request was denied by Virginia’s Bureau of Insurance and the State Corporation Commission due to non-compliance with established deadlines.

In 2023, a federal lawsuit was filed against Sentara Healthcare alleging that false statements were made in their 2018 and 2019 rate filings for ACA plans in Virginia. The legal action is contingent on whether the alleged misrepresentations led to improper federal payments to Optima in the form of subsidies. The case, which is part of an ongoing federal investigation, seeks to determine the legitimacy of the rate filings under the regulations of the False Claims Act.

Additionally, another provider under consideration in Florida, Centene, has also faced legal challenges, which agreed to a $25.89 million settlement with South Carolina over allegations of Medicaid overcharging. The company has been involved in settlements totaling nearly $1 billion across 18 states.

The AHCA’s decision in this re-procurement process will significantly impact the Medicaid recipients in Florida, particularly vulnerable populations like children and Hispanic communities. Recent issues such as longer wait times for Spanish speakers at Medicaid call centers and coverage disparities have brought to light the importance of provider choice in ensuring equitable access to healthcare.

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