State proposes adding $9 million to Medicaid; Managed care groups applaud increase; had hinted at quitting; Moving toward consensus


The state health department proposed adding another $9 million to Medicaid payments yesterday, drawing a positive reaction from managed care organizations that participate in the state program to provide health care for the poor.

The $9 million would be on top of about $30 million the department proposed adding last month. At that time, the managed care organizations (MCOs) said that might not be enough to keep them in the program.

"We really were pretty pleased with the proposal put on the table today," said Barbara Spence, Medicaid director for United Healthcare.

"It's quite clear they were listening to us and hearing, understanding, in a way that hasn't been there before," Spence said.

The proposal -- $6 million to add to rates in rural counties and $3 million for treating pregnant women -- came at yesterday's final session of a task force reviewing Medicaid payments.

The task force will now report to the General Assembly's joint Administrative, Executive and Legislative Review Committee, which would have to approve the regulations setting new rates.

The rates would be in effect for 14 months, while the department gathers data on the health of each Medicaid participant in an effort to set rates for 2001, when payments for sicker people will increase.

The health department and the MCOs have been arguing about rates since July 1998, when the health department said the state was overpaying MCOs. As the debate continued, the state adopted a series of interim rates pending further study.

The Medicaid program provides health insurance for about 350,000 Marylanders, mostly low-income women and children. Under a 2-year-old program called Health Choice, it pays monthly premiums to the managed care organizations, which then pay for whatever care is needed.

Some of the MCOs are commercial health maintenance organizations; others are hospital-sponsored entities created for the program.

While the MCOs generally praised the health department's efforts, there still was some disagreement over how to allocate the $6 million for rural areas and $3 million for pregnant women.

The health department will review those issues before the report goes to the legislature, said Debbie I. Chang, health department deputy secretary.

"We are moving toward consensus," she said. "I believe we will have a Health Choice program that's viable."

Lorraine Doo, Medicaid director for CareFirst BlueCross BlueShield, said CareFirst was "98 percent" sure to stay in the program if the rural money was allocated exclusively to the Eastern Shore and Western Maryland, as the health department suggested, but might drop out if the money were diverted to payments in metropolitan counties.

Doo said CareFirst was expecting to lose $4 million on Medicaid this year, and would still lose money next year under the health department's proposal, but was likely to stay in because its losses would be smaller and it was optimistic about the 2001 rates, which would be adjusted based on the health of the enrollees.

Joanne E. Pollak, vice president and general counsel for Johns Hopkins Medicine, said the continued participation of Priority Partners, an MCO run by Hopkins and a group of health clinics, could hinge on how the money to treat pregnant women is allocated.

"We are hopeful they will take our suggestions," she said. "Then we have to go back and look at what that would do."

Pub Date: 10/07/99

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