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VOLUME 46 | NUMBER 3 | JUNE 2011

Changes in Per Member Per Month Expenditures after Implementation of Florida's Medicaid Reform Demonstration

Keywords. Medicaid; managed care; financial analysis

Objective. To determine the impact of Florida's Medicaid Reform Demonstration on per member per month (PMPM) Medicaid expenditures.

Data. Florida Medicaid claims data from the two fiscal years before implementation of the Demonstration (FY0405, FY0506) and the first two fiscal years after implementation (FY0607, FY0708) from two reform counties and two nonreform counties.

Study Design. A difference-in-difference approach was used to compare changes in expenditures before and after implementation of reforms between the reform counties and the nonreform counties.

Data Extraction. Medicaid claims and eligibility files were extracted for enrollees in the reform and nonreform counties and collapsed into monthly amounts (N=16,875,467).

Principal Findings. When examining the entire population, the reforms had little impact on PMPM expenditures, particularly among SSI enrollees. PMPM expenditures for SSI enrollees increased by an additional U.S.$0.35 in the reform counties compared with the nonreform counties and increased by an additional U.S.$2.38 for Temporary Assistance for Needy Families (TANF) enrollees. An analysis that limited the sample to individuals with at least 3 or 6 months of observations pre- and postimplementation, however, showed reduced PMPM expenditures of U.S.$11.15-U.S.$19.44 PMPM for both the SSI and TANF populations.

Conclusions. Although Medicaid reforms in Florida did not result in significant reductions in PMPM expenditures when examining the full population, it does appear that expenditure reductions may be achieved among Medicaid enrollees with more stable enrollment, who have more exposure to managed care activities and may have more health care needs than the overall Medicaid population.

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