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Sabatini says Medicaid needs cuts to stay viable


Unless cuts are made, Maryland's Medicaid system will not be financially sustainable in the future, state Health Secretary Nelson J. Sabatini told lawmakers in Annapolis yesterday.

State Medicaid costs, which are approaching $5 billion a year, are projected to rise to as much as $600 billion over the next decade, Sabatini told members of the Senate Budget and Taxation health subcommittee.

"We need to make some fundamental changes," he said.

Legislative analysts suggested several measures, including:

Co-payments for Medicaid patients who go to the emergency room for routine, nonemergency care.

A federal waiver to change penalties for people who try to protect income by transferring assets before entering long-term care, such as at a nursing home.

A reduction in fees paid to pharmacists who dispense Medicaid prescriptions. The average cost to managed-care organizations is $2.28 per prescription; Medicaid pays $3.69 to $4.69.

A single preferred drug list for state employees and Medicaid prescription care that would combine purchasing power.

A reduction in the number of days an adult on Medicaid can stay in the hospital.

Increased turnover in the Medical Care Programs Administration by the elimination of several vacant positions.

The department accepted the first four and rejected the last two.

"I believe taxpayers in the state ... believe that poor people have a right to health care, and they expect to buy that health care in the most economical way possible," Sabatini said, suggesting that the state should make more business-like decisions.

The committee asked Sabatini to recoup $9 million from Amerigroup and JAI, two managed-care entities that didn't meet state regulations on the amount of Medicaid premiums that must go toward care. Sabatini disagreed, saying that could result in punishing insurers with superior management who avoid excess expenditures.

Analysts suggested $29.4 million in possible cost reductions. The department agreed to $10 million.

In addition to yesterday's proposals, the department plans $77.2 million in cost-cutting measures in fiscal 2005, including reducing nursing home rates and continuing to impose limits on hospital days. The department also hopes to reduce Medicaid enrollment through an increase in eligibility enforcement.

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