Health insurers owe Fla. $3 million

Health insurers that overstated how much money they spent on patients owe the state millions. Florida relies on private health insurers for some state-run programs.

By , Associated Press

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    Florida Gov. Rick Scott, left, talks to St. Petersburg Times reporter Craig Pittman at the annual convention of the Florida Society of Newspaper Editors and Florida Press Association, Friday, July, 1, 2011 in St. Petersburg, Fla. About a month ago, Scott signed a law that handed Florida's Medicaid program over to private health insurers.
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MIAMI (AP) — Private health insurers overstated how much they spent on patient care and owe Florida health officials $3.1 million in refunds for a government children's health care program, according to a recent federal report.

Under a joint state-federal program called the State Children's Health Insurance Program, Florida's Agency for Health Care Administration pays private insurers to provide health insurance for families who aren't eligible for Medicaid but can't afford private insurance. Insurance companies are required to spend at least 85 percent on medical services. If an insurer spends less, it must refund 50 percent of the shortfall to the state.

But between 2003 and 2007, eight of roughly two dozen reports from private health insurers inaccurately reported how much was spent on patient costs and avoided paying state and federal health officials the difference, according to a report by the Department of Health and Human Services' inspector general. Florida health officials should have received $3.1 million in refunds during that time. The report recommends the state repay the federal government its share — $2 million — and increase oversight going forward.

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The inspector general report blamed the mistakes on the state's lax oversight, saying the state agency and its contractor, Florida Healthy Kids Corporation, lacked policies requiring staff to review reports and "reconcile them to supporting records."

The findings were sent to HHS authorities for "any action deemed necessary," according to the report.

Florida Healthy Kids Corporation, which oversees the insurance program for the state, said in a May letter to federal health officials it had recouped the bulk of the funds from the insurers and returned most of the $2 million federal share to the state.

AHCA told The Associated Press it had repaid federal health officials all but $25,000 and was in the process of returning the last chunk. A spokeswoman also said Florida Healthy Kids Corporation had improved oversight, but declined to elaborate.

The report comes a month after Gov. Rick Scott signed a law putting the state's nearly 3 million Medicaid patients into the hands of private health companies. Patients and doctors complained they couldn't get appointments and were denied medications during a problematic pilot program in five counties.

The latest oversight has critics questioning whether AHCA is equipped to ensure for-profit companies are not lining their pockets with state funds instead of spending it on patient care.

"The job of government is to oversee services that the private sector cannot provide, not to enable private companies to run to the bank with a quarter of the taxpayers' money," said Rep. Elaine Schwartz, a Democrat from Hollywood.

It's not the first time the children's health program has had trouble.

Tampa-based WellCare Health Plans Inc. was charged with engaging in an elaborate scheme to defraud the Florida Medicaid program and Florida Healthy Kids Corporation of about $40 million. WellCare avoided criminal prosecution after agreeing to pay $80 million in restitution in 2009.

"AHCA will have its work cut out to monitor the activities of health plans all over the state," said Laura Goodhue, head of patient advocacy group Florida CHAIN.

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