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Office of Program Policy Analysis and Government Accountability

Medicaid Disease Management Initiative Sluggish, Cost Savings Not Determined, Design Changes Needed, Report No. 01-27, May 2001
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The 1997 Florida Legislature directed the Agency for Health Care Administration to implement a disease management initiative to improve health outcomes and reduce taxpayer costs for Medicaid clients with asthma, diabetes, HIV/AIDS, and hemophilia. Legislation passed in 1998 expanded the initiative to include Medicaid clients with hypertension, cancer, end-stage renal disease, congestive heart failure, and sickle cell anemia.

The still incomplete initiative cost the state $24.1 million through February 2001. The agency has not determined whether the initiative improved health outcomes and saved the $112.7 million projected over four years. In February 2001, the agency backed off making a vendor repay $7.6 million because the agency did not establish an explicit method to measure cost savings before contracting for disease management services.

In general, the agency failed to address significant problems that impeded the initiative. Further, the initiative design does not adequately address problems of the chronically ill who often suffer from multiple diseases. In addition, the design is inefficient and fosters inconsistencies.

We recommend that the Legislature direct the agency to

  • redesign the initiative from a disease-specific to a patient-focused or holistic approach and contract with fewer companies;  
  • establish a defensible methodology to determine cost savings and ensure that overpayments are recovered; 
  •  report on initiative progress in meeting performance expectations, including health outcomes and cost savings; and
  • require OPPAGA to complete a second review of the initiative by December 31, 2002, that reports on whether legislative expectations regarding cost savings and program outcomes are met.

Which Government Program Summaries contain related information?

Medicaid Health Care Services
Agency for Health Care Administration

What other OPPAGA-related materials are available?

  • Report No. 04-34  Progress Report: Medicaid Disease Management Initiative Has Not Yet Met Cost-Savings and Health Outcomes Expectations, published in May 2004.
  • Report No. 03-27 Progress Report: Changes to Medicaid Preferred Drug List Requirements and Competitive Bidding Pharmacy Contracts Could Save an Additional $86.6 Million in 2003-04, published in April 2003.
  • Report No. 01-61 Justification Review: Expected Medicaid Savings Unrealized; Performance, Cost Information Not Timely for Legislative Purposes, published in November 2001.
  • Report No. 01-39 Justification Review: Medicaid Program Integrity Efforts Recover Minimal Dollars, Sanctions Rarely Imposed, Stronger Accountability Needed, published in September 2001.
  • Report No. 01-10  Justification Review: Growth in Medicaid Prescription Drug Costs Indicates Additional Prudent Purchasing Practices Are Needed, published in February 2001.

Copies of this report in print or alternate accessible format may be obtained by telephone (850/488-0021), by FAX (850/487-9213), in person, or by mail (OPPAGA Report Production, Claude Pepper Building, Room 312, 111 W. Madison St., Tallahassee, FL 32399-1475).
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