By Jim Saunders, The News Service of Florida

THE CAPITAL, TALLAHASSEE, October 23, 2012.......After years of back-and-forth legislative debates about the Medically Needy program, the state is preparing to ask federal officials to approve putting the program's tens of thousands of beneficiaries into managed-care plans.

The Agency for Health Care Administration is expected Nov. 26 to submit what is known as a "waiver" application to the federal government. The Medically Needy program serves people who don't qualify financially for the Medicaid program but have costly and debilitating conditions, such as being organ-transplant recipients.

Lawmakers in 2011 approved a sweeping proposal to put almost all Medicaid beneficiaries into HMOs or other types of managed-care organizations. That measure also called for using managed care in the Medically Needy program, and the new waiver application would carry that out.

It remains unclear when --- or even if --- the federal Centers for Medicare & Medicaid Services will approve the Legislature's plans to transform Medicaid. The state in August 2011 submitted two other Medicaid managed-care waiver applications to federal officials, but the proposals still have not been approved.

Earlier this year, AHCA submitted a waiver application to the federal government that would lead to Medically Needy beneficiaries enrolling in what are known as "provider-service networks,'' a form of managed care. That proposal, which also remains pending, would be a "bridge" to the broader use of managed care, said David Rogers, AHCA's assistant deputy secretary for Medicaid health systems.

AHCA on Tuesday held the second of two public hearings that are needed before the Medically Needy request can be submitted. Only officials from the Florida Hospital Association and the Florida Council of Advance Practice Nurses spoke during the hearing.

The Medically Needy program has long drawn heavy debate in Tallahassee, as lawmakers have looked for ways to hold down health-care costs. While the program serves an average of 48,158 people a month, it had estimated costs last fiscal year of $938.6 million, according to information provided at the hearing.

Hospitals have particularly been concerned about cost-cutting proposals in the Medically Needy program. The industry worries, at least in part, that it will get stuck with large amounts of uncompensated care because people with debilitating conditions will need hospital treatment --- regardless of whether the state helps pay for it.

Patient advocates also have been concerned that changes will force Medically Needy beneficiaries to pay larger shares of their medical costs. Under the managed-care proposal, beneficiaries would pay premiums, which one AHCA document estimates would be about $118 a month.

Rogers said the move to managed care is aimed at helping better coordinate services and care for the beneficiaries, which could help hold down costs. As an example, they would be able to continue getting coverage for up to 12 months if they pay the premiums. Currently, they have to qualify each month.