Molina Healthcare's website/courtesy of Casimiro PT/Shutterstock

The state Agency for Health Care Administration has quickly appealed a circuit judge's ruling that it improperly awarded a Medicaid managed-care contract in Southwest Florida.

Leon County Circuit Judge Karen Gievers last week rejected AHCA's contract with Molina Healthcare of Florida Inc., finding the agency exceeded a limit on the number of health plans that state law allows to serve Medicaid beneficiaries in Charlotte, Collier, DeSoto, Glades, Hendry, Lee and Sarasota counties.

Gievers, who sided in the lawsuit with plaintiff Best Care Assurance LLC, a managed-care plan affiliated with the Lee Health System, also ordered that AHCA notify any Medicaid beneficiaries assigned to receive care from Molina under the contract that they will be reassigned to other health plans.

Attorneys for the agency quickly filed a notice of appeal at the Tallahassee-based First District Court of Appeal. The notice had the effect of placing an automatic stay on Gievers' ruling until the appeals court can decide the case.

Best Care was one of four plans awarded contracts in April to serve patients in what is known as Medicaid Region 8. Molina was not one of the four plans and filed a protest. It ultimately reached a settlement in June with agency officials that included it receiving a contract in the region.

But Best Care filed the lawsuit in August, arguing that state law imposes a limit of four managed-care plans in the region to provide “managed medical assistance” services, the services provided to most Medicaid beneficiaries. The other plans selected in April to provide such services in the region were Humana Medical Plan Inc., Sunshine State Health Plan Inc. and WellCare of Florida Inc.

Gievers, in a nine-page ruling, wrote that there is “no exception or qualification to the unquestionable statutory cap of 'no more than four' [plans] for Region 8.”

“Under Florida law … AHCA lacks the authority to ignore clear, unambiguous statutes such as the one providing the statutory cap of four contracts for Region 8,” she wrote.

Florida lawmakers in 2011 approved an overhaul of the Medicaid system that has led to most beneficiaries enrolling in managed-care plans. With an initial set of contracts poised to expire, the AHCA went through a lengthy procurement process that led in April to it awarding new contracts in 11 regions of the state.

In defending the decision to award a contract to Molina in Region 8, AHCA pointed, in part, to a section of state law aimed at encouraging managed-care plans to seek contracts in two regions of Northwest Florida. That section allows the agency to award what are known as “bonus” contracts in other regions to managed-care plans that are awarded contracts in the Northwest Florida regions.

AHCA awarded a contract to Humana in Northwest Florida and said that Humana's contract in Southwest Florida's Region 8 is considered a “bonus” contract. AHCA attorneys contended the Humana bonus contract should not be counted toward the limit in Region 8, effectively freeing up a spot for Molina.

“AHCA's interpretation of the statute is also reasonable because it increases competition,” AHCA attorneys wrote in an October filing in circuit court. “But Best Care[] is not because it has the practical effect of reducing competition.”

In a September filing, however, Best Care said the agency's award of the Molina contract would reduce the number of Medicaid beneficiaries and revenue going to Best Care in the managed medical assistance, or MMA, program.

“The Legislature did not accidentally place a cap on the number of MMA plans to be selected in Region 8,” Best Care's lawyers wrote. “Rather, the Legislature specifically set the allowable range for the number of MMA plans to be selected in Region 8 to ensure stability but allow patient choice.”

Jim Saunders reports for the News Service of Florida.