House health care spending plan ups the stakes for infant mortality rates

House budget writers are giving Medicaid managed care plans an ultimatum: Reduce infant mortality or take a pay cut.

The provision, tucked into the House’s health care spending plan, would require the Agency for Health Care Administration (AHCA) to continue withholding 2% of each managed care plan’s capitation payments each year — a provision has been in place since October — but would rewrite the rules on how plans could earn it back.

According to the proposal, only a maximum of two managed care plans out of the eight operating in the state could potentially unlock the full 2% — the plan that records the largest infant mortality rate reduction and the plan that reports the greatest reduction in infant mortality cases by raw numbers.

If the same plan reports both the largest rate reduction and lowest arithmetic total, it would be the only plan eligible to unlock the full withholding from AHCA.

Other plans, meanwhile, would be able to unlock half the withheld funds if they show an improvement, by rate, year-over-year. Any plan that backslides would forfeit the full withholding and be suspended from auto-assignment for four months.

Pensacola Republican Rep. Alex Andrade, who chairs the House health care budget writing panel, said the structure is intentional and characterized it as an enhancement to the current quality withholding framework, through which plans are judged on a variety of metrics ranging from industry-standard HEDIS metrics to enrollee satisfaction ratings.

Under the current structure, all plans are eligible to receive the full withholding. Andrade says the House proposal would inject competition into the managed care system and incentivize Florida bucking the national trend of rising infant mortality rates.

“The idea is, so long as you show improvement, you’ll get at least 1% of your revenue back,” Andrade said. “If you show the most improvement, you’ll get the full 2%.”

If the 2% withholding is the carrot, the auto-assignment timeout is the stick — and there would be significant financial implications for plans hit with it.

Auto-assignment is a fallback process, which triggers when a Medicaid beneficiary does not select a specific managed care plan within 60 days of enrollment. Auto-assignment, by design, tilts toward plans with lower enrollment as a means to spread the beneficiary pool equitably among all managed care plans.

An exact total for auto-assigned beneficiaries in recent plan years was not immediately available, however the pool has been significant in the past. In 2019, during the transition to then-new managed care plans, one region of the state had 112,836 recipients (roughly a quarter of the overall pool) in exiting plans who were eligible for auto-assignment.

The mechanism, in the simplest terms, guarantees plans a steady stream of new enrollees. A four-month ban could significantly depress enrollment numbers and, by extension, plans’ revenues.

Infant mortality rates are shaped by a web of factors that extend well beyond managed care networks and arguably beyond the scope of budget negotiations — maternal health access and socioeconomic conditions are among many significantly influential factors. Still, House budget writers are betting that tying a meaningful slice of Medicaid revenue as well as enrollment growth to a single, high-stakes outcome will force plans to sharpen their focus.

Whether the upper chamber has the same aspiration remains to be seen. Senate Budget Chief Ed Hooper on Thursday confirmed that the Senate will not pull back the curtain on its 2026-27 spending plan until next week.