Providers Push Back on Plan to Extend Medicaid Managed Care

Scott adds that insurers' definition of "good faith" is the HMO demanding reduced reimbursements without much provider input and the state going along with the cuts.

"That is the antithesis of a free market system. It's bizarre how they can make that recommendation with a straight face," says Scott.

Rueben says that—rather than giving tax dollars to out-of-state insurance companies—the state should continue to support local provider service networks that he says are cost-effective, and popular with beneficiaries.

"If you can do it here in Florida and keep those dollars in Florida, it is better than doing this for commercial HMOs that take their profits out of Florida," Rueben says. "Hospitals and doctors have made a commitment to live and work in Florida and serve Florida patients. These HMOs, if the picture is less than rosy, they're out of here."

Garner says the kind of Medicaid savings needed to help resolve the budget crisis can only be generated by eliminating fee-for-service payments. "The core of the problem is the way the fee-for-service system functions, which is to reward payment for utilization. The more you use the more you get paid," he says.