Medicaid shift to HMOs will start in week Marketing abuses spur state to take over enrollment process; HMO 'prospecting' ends; One provider foresees increased costs of telling its story


In a week, Maryland will begin the first phase of moving Medicaid recipients into managed-care plans, as the state takes over Medicaid HMO enrollment.

State-run enrollment is aimed at curbing marketing abuses, which resulted in fines to several HMOs and criminal convictions and guilty pleas for more than two dozen marketers and state employees on charges ranging from bribery to forgery to Medicaid fraud.

Beginning Oct. 1, HMOs can still advertise, but the state will review advertising materials. The HMOs, however, can't actually sign up a Medicaid recipient who responds to an advertisement. The state will do the enrolling until January, when it plans to turn the job over to a contractor. The contract is currently being bid.

State enrollment counselors will present recipients with a chart comparing benefits offered by the different plans and with a brochure from each plan, said Joseph Millstone, director of the state health department's medical care policy administration.

This means no more HMO recruiters. Recruiters have been convicted or cited by state investigators for bribing government employees to get names and addresses of Medicaid recipients, forging enrollment papers and numerous other offenses to get business.

HMOs have had a mixed reaction to the state plan, said Natalie Collins, deputy director of the Maryland Association of Health Maintenance Organizations. "Some are very comfortable; some are lukewarm; and some are opposed," she said.

"We had supported moving the marketing from the [HMO] companies to a third party," said Fran Tracy, vice president for government affairs for Blue Cross Blue Shield of Maryland, which owns and operates several HMOs.

"When you look at some of the practices of some of our competitors, this has been a source of concern."

"No 'prospecting' will go on anymore, and we're supportive," said Kevin C. O'Neill, senior vice president of sales and marketing for Chesapeake Health Plan.

"It has not been a good environment for marketing."

But O'Neill disagrees with state health officials who say the centralized marketing will cut costs for HMOs, allowing the state to reimburse them at a lower rate for care.

"We will have to conduct more aggressive media campaigns" to explain the advantages of Chesapeake without doing face-to-face marketing, he said.

Whether marketing savings can justify a lower reimbursement rate is one of the key issues remaining unresolved as the state prepares for a complete switch into managed-care plans of low-income people now covered by Medicaid.

The state hopes to have regulations governing the change approved by legislative committees by Nov. 1, so managed-care plans can begin to sign up for January participation, according to Millstone.

Collins said the HMOs are hoping to get the state to spell out in more detail how it will determine the reimbursements and exactly what benefits a participating HMO will be expected to provide. "These are areas that need to be addressed in order to determine whether we're going to play," she said.

The state's plan calls for 220,000 low-income Medicaid recipients to be moved into HMOs or similar plans between January and June.

Another 110,000 Medicaid recipients are already in HMOs, but would also be part of the new enrollment process.

Participants are free to choose from among participating health plans, but if they do not choose, the enrollment contractor would assign them to a plan, based on which plans the doctor caring for them is affiliated with, which plan they have been in previously and whether the plan offers adult dental benefits.

Pub Date: 9/23/96

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