Do Provider Service Networks Result in Lower Expenditures Compared with HMOs or Primary Care Case Management in Florida's Medicaid Program?

Objective: To determine the impact of Florida's Medicaid Demonstration 4 years post-implementation on per member per month (PMPM) Medicaid expenditures and whether receiving care through HMOs versus provider service networks (PSNs) in the Demonstration was associated with PMPM expenditures.

Data: Florida Medicaid claims from two fiscal years prior to implementation of the Demonstration (FY0405, FY0506) and the first four fiscal years after implementation (FY0607-FY0910) from two urban Demonstration counties and two urban non-Demonstration counties.

Study Design: A difference-in-difference approach was used to compare changes in enrollee expenditures before and after implementation of the Demonstration overall and specifically for HMOs and PSNs.

Data Extraction: Claims data were extracted for enrollees in the Demonstration and non-Demonstration counties and collapsed into monthly amounts (N = 26,819,987 person-months).

Principal Findings: Among SSI enrollees, the Demonstration resulted in lower increases in PMPM expenditures over time ($40) compared with the non-Demonstration counties ($186), with Demonstration PSNs lowering PMPM expenditures by $7 more than HMOs. Savings were also seen among TANF enrollees but to a lesser extent.

Conclusions: The Medicaid Demonstration in Florida appears to result in lower PMPM expenditures. Demonstration PSNs generated slightly greater reductions in expenditures compared to Demonstration HMOs. PSNs appear to be a promising model for delivering care to Medicaid enrollees.