Evaluating Florida's Medicaid Provider Service Network Demonstration Project

What effect will enrollment in Provider Service Networks (PSNs) have on Medicaid providers, costs to the program, and care quality and outcomes for beneficiaries? Researchers at the University of Florida (with support from Florida’s Agency for Health Care Administration (AHCA)) evaluated a demonstration project in Florida whereby Medicaid beneficiaries had the opportunity to enroll in PSNs for their health care. Currently, these beneficiaries have the choice of two other products: a Medicaid HMO or a fee-for-service model with primary care case-management. The demonstration was mandated via a state legislative order and was designed and implemented through a Medicaid 1915 waiver. The goals of the PSN demonstration were to slow the growth in healthcare costs by reducing the role of the insurance middle-man; to offer incentives to providers to share risk (unlike in Medicaid managed care models where providers may share risk but would not have incentive for doing so); and to improve coordination and collaboration between Medicaid administrators and providers to improve client outcomes. The evaluation included three distinct, yet overlapping phases: a qualitative study of how the demonstration affected organizations that applied for PSN status; a utilization and reimbursement analysis to assess the PSNs’ cost-effectiveness; and a quality and outcomes analysis, examining quality of care, patient satisfaction, and patient health outcomes of beneficiaries in PSNs. The objective of this evaluation was to understand in what ways the design and implementation of this unique financing/delivery model affects patients and providers, so that policymakers in and outside of Florida may weigh its merits for adoption.