By Carol Marbin Miller

Florida health administrators have agreed to settle a long-simmering lawsuit that claims the state's Medicaid insurance program for needy children is so poorly funded and managed that impoverished youngsters are consigned to a second-rate healthcare system where long waits for access and substandard care are the norm.

A federal court judge in Miami sided with needy children and their doctors in a 153-page ruling in December 2014, saying state lawmakers had so starved the Florida Medicaid program of funding that it was operating in violation of federal law.

In the ensuing months, health administrators -- at the urging of U.S. Circuit Judge Adalberto Jordan, who presided over the trial -- mediated the dispute with lawyers for the children and the state Pediatric Society. The negotiations yielded a settlement with the heads of the state Department of Health, the Agency for Health Care Administration and the Department of Children & Families, all of whom were parties to the litigation.

Though state leaders had continued the battle even after Jordan's stunning ruling, healthcare for needy children had become a public relations nightmare for the state. Administrators at the Department of Health last year purged 13,000 children from one of the premier Medicaid plans for youngsters, Children's Medical Services, and had shuttered CMS offices, including clinics for children with disfigured faces and other disabilities. Public outrage over the cutbacks, and other agency moves, may have cost the health department's secretary, John Armstrong, Senate confirmation.

This is a good settlement, and we got more than I thought we would get from the state. Stuart Singer, lawyer for plaintiffs

The lawsuit was a protracted affair, resulting in a 94-day trial, 13,000 court docket entries and the taking of 135 sworn statements, or depositions. Eagerness to end the campaign appeared to be mutual.

In the 29-page agreement, the leaders of three state agencies wrote that they "expressly deny that any of the claims brought by [the children and doctors] have any merit." Both parties to the suit said they signed off on the settlement "to avoid the uncertain outcome of continued litigation and to provide improvements in the delivery of Medicaid to all eligible Florida children."

Under the settlement, the healthcare administration, which oversees the Medicaid program, agreed to create "incentives" for the program's managed care plans to increase the rates paid to most pediatricians and pediatric specialists. For the next three budget years, through at least September 2019, the healthcare agency, or AHCA, will require managed care plans to plow anticipated "program savings" into higher payment rates for primary care doctors who meet the incentives.

Settlement Agreement

Down the road, pediatric specialists -- such as surgeons, orthopedists, cardiologists and pulmonologists -- could qualify for higher reimbursement, as well, along with dentists, who had flocked from the Medicaid program in droves because they said they lost money for every Medicaid recipient they treated.

The incentives include greater access to medical care by Medicaid recipients and improved "outcomes" for patients.

Doctors who meet certain standards, such as board certification, may be eligible for reimbursement at or near the rates applied to doctors who participate in Medicare, the federal insurer for elders and disabled people that pays doctors substantially more than Medicaid -- and enjoys far wider participation as a result. Medicare is administered by the federal government. Medicaid, in contrast, is run by the state, and funded jointly by the state and federal governments.

Some doctors who participate in the Medicaid program could see a rate hike of about 40 percent, said Stuart Singer, who spearheaded the case.

And because perhaps 250,000 impoverished Florida children may be eligible for Medicaid but unaware they are, the settlement requires the state to mount an energetic outreach program to prospective clients. About two million Florida children already are enrolled in the insurance program.

Liz Dudek, who heads the Agency for Health Care Administration, said Tuesday that, with the decade-long litigation resolved, "all parties will work together to achieve their shared goal of improving access to quality medical and dental services for Medicaid-eligible children through continuous improvements to Florida's Medicaid program."

"I am happy that we were able to find a very positive resolution for this case and am grateful for all of the hard work that the agency has put forth in reaching this agreement," Dudek added, in a prepared statement.

Singer, who had shepherded the suit for a decade, declared his side "very happy" with the settlement. "This is a new chapter of working together with, rather than against, the state -- rather than being pitted against each other in a lawsuit," Singer said.

"This is a good settlement, and we got more than I thought we would get from the state," Singer said.

Singer's law firm, Boies Schiller & Flexner, will share with co-counsel about $12 million the state agreed to pay the litigants for costs and fees, an amount that will cover about 60 percent of what the firm invested in the lawsuit, Singer said.

The lawsuit had become a protracted affair, resulting in a 94-day trial, 13,000 court docket entries and the taking of 135 sworn statements, or depositions.

One of the lawsuit's authors is a Tallahassee cardiologist, Louis St. Petery, who formerly led the Pediatric Society. He said he's glad to put the acrimonious suit behind him, but far from certain that needy children will realize significant benefits -- in the short term or even longer.

"My ideal situation," St. Petery said, "would have been that we'd settle this thing, flip a switch, and then everything is better." He added: "Everything is not going to be better for a long time."

For reimbursement rates to improve significantly, the state is counting on the operators of its managed care plans to save lots of money by being more efficient. But, said St. Petery, the state had been unable over the past couple of years to demonstrate that was happening.

"It can't be done through alchemy," Singer acknowledged. Before Florida shifted Medicaid to managed care, the state's traditional fee-for-service model fared no better, he added.

Ultimately, lawmakers will likely have to set aside perhaps hundreds of millions in new dollars to fully fund the settlement. Testimony in the 2005 lawsuit suggested it could cost upwards of $250 million to increase the reimbursement rates to a level that would no longer discourage participation among doctors. If the Legislature refuses to appropriate the necessary dollars, the litigation could be resumed.

Still, St. Petery said, at least doctors and advocates can talk to state leaders now, something they could not do without all the lawyers being present while the lawsuit dragged on.

"I'm tired of fighting for 11 years," St. Petery said. "Will it be fixed? I have a feeling it won't be fixed."

(c)2016 Miami Herald