At a revenue estimating conference last week, AHCA and state economists acknowledged that the legal quagmire surrounding the Medicaid Managed Care program has caused problems with overall budget forecasting.

State economists were wringing their hands last week at a Revenue Estimating Conference over the lack of answers on Medicaid spending from the Agency for Health Care Administration (AHCA). To make matters worse, officials acknowledged that the big question marks may not be erased any time soon thanks in part to lawsuits filed against the agency and it’s beleaguered Medicaid Managed Care procurement process.

A trio of lawsuits allege, among other things, that AHCA purposefully ignored its own evaluation process in order to allow lower scoring health care providers to win massive contracts by leapfrogging higher-scoring providers. But the reasons behind those awards remain unclear. While the disputes, worth billions of dollars, linger in the courts, AHCA can’t accurately project future Medicaid costs, and that in turn hampers the ability of state lawmakers to set an accurate budget for the upcoming fiscal year.

The contracts awarded by AHCA are slated for a phased rollout starting September 1, with full implementation expected by January 1, 2025. But those dates, and the dollars that fund them, are currently in limbo while the courts take a look at the facts.

Amy Baker, Florida’s chief economist, made it clear that the questions raised by the unresolved legal issues made accurate forecasting of the state’s budgetary needs much more difficult. Medicaid consumes about 30 percent of the state’s $117 billion annual budget.

To address the uncertainty, AHCA Deputy Secretary for Health Care Finance and Data Tom Wallace proposed blending the existing and projected contract rates. He suggested using the current rates until January and then switching to the new rates for the remainder of the fiscal year. However, Baker and her colleagues were hesitant, noting that such an approach assumes a timely resolution of the legal disputes, which remains far from certain. It’s not clear how much variance exists between the two values, nor how that might impact financial planning by the state.

The legal challenges originated from healthcare providers ImagineCare, AmeriHealth Caritas, and Sentara, who allege that AHCA’s contract award process was biased towards incumbent providers. These providers filed protests after AHCA announced its intent to award contracts to other managed-care organizations. The cases were referred to the state Division of Administrative Hearings (DOAH), with a hearing mandated within 30 days.

But those unresolved legal disputes are not only causing headaches for state economists but also raising concerns among lawmakers. Adding pressure to the situation is the fact that delays in resolving the challenges could impact the implementation of the new contracts with the potential to disrupting Medicaid and related health care services for millions of Floridians.

In addition to the administrative hearings, AHCA’s decisions are being contested in Leon County Circuit Court, where the number of litigants continues to grow. Major players like Community Care Plan (CCP) and Florida Community Care (FCC) have intervened on behalf of the state, while some parties are seeking to prevent AHCA Secretary Jason Weida from executing new contracts until the legal challenges are resolved.