Medicaid managed care plans could see reductions if House gets its way

by Christine Sexton, Florida Phoenix
February 19, 2026

Is it a clarification or a cut?

For the first time since the inception of the state’s mandatory Medicaid managed care program, there’s a move in the Legislature to reduce payments to the contracted plans that provide the care.

The House’s proposed health care budget includes a 1.3% “efficiency” savings, or a $206.2 million reduction to the managed care plans for the coming state fiscal year that starts in July.

Rep. Alex Andrade, the Pensacola Republican who chairs the House Health and Human Services Appropriations Subcommittee, told the Florida Phoenix this week that the reduction represented a “clarification.” 

The House included the 1.3% reduction, he said, to reflect claims by Gov. Ron DeSantis and the Agency for Health Care Administration that the newest Medicaid managed care contracts include a 1% savings in Medicaid costs for Florida taxpayers.

“The governor claimed that he negotiated 1% efficiency reduction and AHCA claimed that, but they never, never, reflected it in their budgets. So, it’s largely just a clarification of that,” Andrade said.

DeSantis announced the savings as he rolled out his legislative budget request Dec. 10, Andrade said. However, the governor didn’t publicly remark on the Medicaid procurement during a press conference at the Dr. Phillips Center for the Performing Arts in Orlando.

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When asked why the House increased the efficiency savings from 1% to 1.3% Andrade said: “Just to hit the $270.5 million. Because there was no basis. There was no mathematical calculator or basis for the 1%; there was no real backup. We just thought, ‘Okay. Well if they can do 1%, they can do 1.3%.”

Attempts to contact the Florida Association of Health Plans for comment were unsuccessful.

Florida requires most Medicaid enrollees, from the young to the old, to receive health care through managed care plans. AHCA in spring 2023 released its third Medicaid managed care invitation to negotiate new multiyear contracts worth tens of billions of dollars.

The new contracts were signed and fully went into effect Feb. 1, 2025. 

The 1.3% efficiency savings isn’t the only potential reduction to the Medicaid managed care plans.

2% holdback

In an attempt to lower the state’s infant mortality rates, the House budget proposes withholding 2% of what the state pays per client per month to the contracted plans.

Under the House proposal, contracted plans that lower their infant mortality rates can earn back half of what is withheld.

However, under terms of the House budget, plans with the greatest reductions in their infant mortality rate will earn back the full 2% withhold, as would the plan with the largest reduction in infant mortalities. Plans whose infant mortality rates increase would have a four-month ban on new enrollment in the House budget.

Andrade described the 2% holdback as not a reduction but a re-alignment of a similar requirement in the Medicaid managed care contracts. 

The new contracts require the managed care plans to meet or exceed performance targets in several areas:

• Controlling blood pressure;
• Glycemic status assessment for patients with diabetes;
• Well-child visits in the first 30 months;
• Child and adolescent well-care visits;
• Follow-ups after hospitalization for mental illness within seven days;
• Follow-up after emergency department visit for mental illness within seven days;
• Timeliness of prenatal care;
• Postpartum care.

Plans that earn an average 2 points per category on a five-point scale can earn back the 2% withhold. Plans that score less than an average 2 points per category won’t earn the full withholding back but may not receive its full withhold but may receive a portion of the withhold based on their performance.

Andrade said the House budget scraps those complicated requirement in the contract and replaces it with just one measure.

“They’ve already contracted to risk 2% of their revenue. So, I don’t see that as a gain nor a loss to them, like they’ve contracted right now to improve health metrics,” he said. “The only way they’d lose the full 2% of the revenue is if their infant mortality rates increase and, if they increase, they also have a freeze on new assignments for four months.”

The Senate budget doesn’t include the cuts to the contracted Medicaid managed care plans. 

The House passed its budget Thursday and the Senate is expected to follow Friday. The chambers have to pass their respective spending plans before legislative leaders can agree on budget allocations — or the amount of money assigned to each budget area, such as education, health care, and transportation — and begin negotiating the differences between the two spending proposals.

While legislators will consider hundreds of bills, the state budget, or General Appropriations Act, is the only must-pass bill of the year.

Florida Phoenix is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Florida Phoenix maintains editorial independence. Contact Editor Michael Moline for questions: info@floridaphoenix.com.