Looking at a proposed 8.9 percent rate increase for next year, Insurance Commissioner Kevin McCarty and business groups Tuesday criticized a controversial drug-dispensing practice that they say drives up workers' compensation insurance costs.

The practice involves doctors dispensing what are known as "repackaged" drugs to injured workers, rather than writing prescriptions to be filled at pharmacies. Critics say prices for the repackaged drugs are inflated -- and account for 2.5 percent of the proposed 8.9 percent average rate increase for businesses.

This wasn't the way it was supposed to work.

State lawmakers were supposed to bite the bullet and make cuts in the 2011-12 budget and -- take a deep breath -- things would all get better.

But as budget committees met this week, gloom set in again. Medicaid costs are rising, schools need to find money, tax revenues are lagging. You get the picture.

Amid questions about taking a free-market approach, a House panel Tuesday reopened a long-running debate about state approval of new health facilities.

House Health Care Appropriations Chairman Matt Hudson, R-Naples, said the state has taken a series of steps in recent years to scale back the so-called Certificate of Need process. He questioned whether "we could make the free market work" for facilities such as hospitals and nursing homes.

Two Senate leaders said Tuesday they expect lawmakers to plunge back into a debate next year about public hospitals, as a panel appointed by Gov. Rick Scott studies the system.

Senate Health Regulation Chairman Rene Garcia, R-Hialeah, said he plans to again propose a bill that could require circuit judges to sign off on the sales or leases of public hospitals.

In a win for unions, the Florida Supreme Court this week refused to take up a case that will force the city of Gainesville to collectively bargain changes in retiree health-insurance benefits.

The city, which sought to overturn a 1st District Court of Appeal ruling, argued in court documents that the case could have broad implications for government agencies that want to rein in benefit costs.

Contending that not enough money was spent on patient care, the state Agency for Health Care Administration is trying to recoup $4 million from a firm that manages Medicaid mental-health services.

Tampa-based Florida Health Partners Inc. challenged the agency in cases filed last week in the state Division of Administrative Hearings.

The dispute centers on whether Florida Health Partners in 2006 met a requirement that it spend 80 percent of the money it received -- known as a "medical-loss ratio" -- on caring for Medicaid patients.

Florida is moving forward with a plan that will lead to health-insurance changes for thousands of state employees now that an appeals court broke a legal logjam.

The state Department of Management Services said Friday that UnitedHealthcare of Florida signed a contract to provide HMO services in 18 counties.

That announcement came after the 1st District Court of Appeal rejected parts of a legal challenge filed by United and declined to issue a stay. The other 49 counties will be divided among five HMOs that reached agreements with the state last week.

Florida doesn't have a year-round Legislature. But it felt that way this week.

With the 2012 session starting early because of redistricting, lawmakers, staff and lobbyists traipsed back up the hill to start committee meetings.

True, the meetings included little real action. But committees got a clearer picture of the redistricting process, while also hearing presentations about tricky issues such as Medicaid reform and budget problems at the Agency for Persons with Disabilities.

Pointing to tough economic times for consumers, the chairman of the Florida Public Service Commission cautioned Tuesday about being "overly aggressive" in adding renewable energy.

Art Graham told a House panel he thinks the state needs to move forward with renewable energy, which could include sources such as solar power and biomass, but that people do not want to pay higher utility bills now.

"It's a great thing,'' Graham said. "Florida needs to get there.But it's costly.''