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Gov. Bobby Jindal’s administration wants to move fast to secure a federal waiver to implement Medicaid reform in Louisiana, the idea being to improve the delivery of health services to low-income families and the disabled, resulting in a healthier population, more accountability and significant savings.

Guiding the effort is Alan Levine, Jindal’s secretary of Health and Hospitals, who oversaw a similar experiment in Florida as Medicaid adviser to former Gov. Jeb Bush. Levine says the Florida pilot projects have been mostly successful. Several critics have come to the opposite conclusion, although Levine says such criticisms have not been based on reliable data.

And though the details aren’t even close to being worked out, Levine is convinced Louisiana’s reform effort will succeed in part because of how it will differ from Florida’s.

Levine’s mandate to retool Medicaid comes from the Louisiana Medicaid Reform Act of 2007. Getting the federal waiver necessary to do so sooner rather than later is important because once a new administration lands in Washington, D.C., it could really slow things down, he says.

Florida Medicaid reform is performing admirably or not, depending on whose study you believe. A July report from the Community Health Action Information Network, a patient advocacy group, says the Florida Agency for Health Care Administration vastly inflated the savings created by reform. A survey of doctors by the Health Policy Institute at Georgetown University seems to point to a decline in physician participation since reform.

Joan Alker, lead investigator in the study, says the survey—to which only 8% of the physicians queried responded—indicated a decline in provider participation, particularly among specialists. Another survey is being conducted now, she says.

“What we did find is that the main issue providers cited was that payment was not getting better and some said it was getting worse,” Alker says.

Levine dismisses the Georgetown study, arguing that it wasn’t based on scientific data. Studies that are based on empirical data show an increase in provider participation, he says.

Florida’s Medicaid reform pilots started in 2006 in Broward and Duval counties, and in 2007 was expanded to three more counties. A report by former AHCA Inspector General Linda Keen found problems with the pilots, however, and Medicaid reform was not expanded to other counties. Keen has since stepped down, and AHCA has a new secretary, Holly Benson, who is expected to push ahead with expanding reform.

In response to criticism, Levine cites a report by the James Madison Institute, a free-market think tank, that argues previous studies on reform are flawed and that competition in the pilot counties has been spurred and significant cost savings realized. The James Madison study conducted an analysis by medical specialty showing that more physicians—not fewer—were seeing Medicaid patients since reform, Levine says. The number of orthopedists doubled, for example, he says, while 97% of primary care doctors remained in Medicaid as opposed to fleeing.

“Believe me, I want it to work,” Levine says. “I’m humble enough to know that when you’re changing a marketplace you’ve got to be willing to accept criticism and if somebody points out that something’s not working. But they have to base that on data. When you look at the data, there are elements of it working so remarkably well it’s a crime if we don’t employ those tactics.”

Levine says Louisiana’s transformation of Medicaid will look like Florida in the general sense of bringing the marketplace to bear in solving problems. In the pilot programs, residents eligible for Medicaid could choose among HMOs or other health networks called Provider Service Networks. A hospital, for example, could set up a PSN. Even LSU will probably set up a PSN and is shopping around for a managed care partner, Levine says.

In Florida, the PSNs and HMOs compete against each other, with the marketing advantage going perhaps to the HMOs, which have been ensconced in the Florida Medicaid market for years. In Louisiana, individual PSNs will be managed by HMOs and compete against other PSN/HMO teams.

“I do not believe in opening the floodgates to HMOs,” Levine says. “I believe in having partnerships where you use the expertise of HMOs to do the things they do well, but you have other systems in place that hold them accountable.”

Levine’s agency will require HMOs to partner with a provider, which he says creates a “natural, market-based filter.” DHH will do an actuarial analysis to decide how many HMO/PSNs a given market requires. DHH will decide which HMOs get in based on metrics such as history of patient satisfaction, promptness of payment, etc. The HMOs that make the cut will compete against each other in that market. That way, the state is out of the business of setting Medicaid rates. The HMOs do it instead—which is probably not going to be music to most doctors’ ears.

“You will never find a physician who’s happy with managed care,” Levine says. “If you go talk to 10 doctors today, I guarantee every one of them will tell you they’re not paid enough.”

PSNs aren’t the essence of reform, just a piece of it, Levine says.

“We’re all for expanding access,” he says. “We’re not for spending more money in a system that’s broken. Everybody’s already acknowledged the system’s broken. That’s why the Legislature changed the law.”

Alker, the Georgetown critic of Florida reform, also complains that the Florida waiver was done behind closed doors, with too little stakeholder participation, and that the result was too much power in the hands of HMOs.

Levine says he took it upon himself to put together an advisory committee, though it wasn’t required by Louisiana’s Medicaid reform law, but did so to catch potential problems or weaknesses early on. The advisory committee includes representatives from physician groups, hospitals, public heath, LSU, HMOs and others.

Fred Whitson, director of Medical Economics and Managed Care for the Florida Medical Society, says the various studies on reform—pro and con—haven’t answered a basic question.

“We’re waiting to see does it really save money,” Whitson says. “Is it cheaper than the way it’s operating now? To be perfectly honest, we don’t know yet.”

If reform through managed care is not more economical than old fashioned fee-for-service, it’ll be a hard sell taking the concept statewide. Studies are under way that everyone hopes will answer that question. Doctors in the pilot counties, meanwhile, are divided on reform depending on how much bargaining power they have with HMOs or PSNs to get higher rates of reimbursement from Medicaid. Scarce specialists are likely to have more bargaining power. Primary care doctors, who aren’t as scarce, are likely to have less.

“It’s a mixed bag,” Whitson says.

Levine isn’t buying the negative reviews of the Florida Medicaid reform experiment he was instrumental in orchestrating, and says his feelings won’t be hurt when people criticize his plans for Louisiana.

“I’m putting my plan on the table,” he says. “It’s easy to shoot down someone’s plan, but my question is always going to be what’s your alternative? Because so far there isn’t one.”

Dr. Steven Spedale is a Baton Rouge pediatrician and member of Levine's advisory committee, representing the Louisiana chapter of the American Academy of Pediatrics. Spedale says it's too early to know how well Florida's Medicaid reform will work, since only three years have passed in what was designed as a five-year demonstration project.

"It's hard to hold it out as the model to use because no one has the final numbers," he says.

Spedale is concerned about moving too fast with Louisiana Medicaid reform, saying numerous questions remain unanswered. He sees the aggressive timeline as "a big challenge"—notwithstanding Levine's point that rushing to get the waiver before power changes hands in Washington isn't the same as rushing through the details of implementation.

Another issue that concerns Spedale is directly tied to how much doctors and other health-care providers will get reimbursed by Medicaid once reform takes hold. Convincing providers who don't take Medicaid patients that they should participate has been the biggest issue in every state that has attempted reform, and it's usually related to low reimbursements, he says.

"It's not an unwillingness to provide care,” Spedale says, “but you have to be able to pay your bills.”