Md. cuts health plan by 16,000

Gov. Robert L. Ehrlich Jr. said yesterday that his administration has found 16,000 ineligible people on the rolls of the state's Medicaid program for the poor, and expects to find nearly 6,000 more by the end of the fiscal year. The finding is expected to shave $10 million to $15 million this fiscal year from the Medicaid budget.

About $40 million is projected to be saved in the next fiscal year which begins July 1. The state Medicaid budget is currently about $4.5 billion.


"The money didn't stay in my pocket for long," remarked the governor. It will go to cover other shortfalls in the health budget, particularly in mental health, said state Health Secretary Nelson J. Sabatini.

By "finding" the money (half in state funds and half in federal matching funds), Sabatini said, the health department will be able to avoid cuts it might have made in other programs.


Ehrlich said the enriched Thornton school aid formula and the rapidly growing Medicaid budget were "the twin drivers of the deficit. One was imposed, and the other has grown into a monster."

Over the past six years, the cost of health care in the Medicaid program has grown 62.6 percent, not counting the costs of expanding the program to 150,000 middle-income children.

Controlling Medicaid will take both sharp administration and changes in the way benefits are delivered in the future, Ehrlich said. Failing to keep the rolls accurately, he said, represented "a negligent expenditure of public funds," which has been corrected by Sabatini.

Medicaid covers nearly 600,000 people in Maryland. Most are welfare mothers and their children, but the insurance also covers some low-income handicapped and low-income elderly in nursing homes who have "spent down" their assets.

Sabatini said the health department began reviewing eligibility last fall, when some enrollment categories had numbers that didn't look right, based on national trends. What the department found, he said, is that not all information had been transmitted accurately from the welfare computers to the health computers.

Although they had lost welfare eligibility, he said, some people stayed on the Medicaid rolls, although their income had increased, they had moved out of state or died, or they had given birth months earlier (the program covers some pregnant women until two months after delivery).

Sabatini said there was no evidence of fraud on the part of the ineligible enrollees - just poor transmission of records from one agency to another. He said the problem had been corrected, and a system was in place for monthly match-ups of welfare and health records.

The state covers about four in five Medicaid enrollees by paying monthly fees, averaging about $185 per person, to HMO-like entities called Managed Care Organizations, or MCOs.


Even though the enrollees may have understood they were not eligible and had not generated any claims for treatment, the state was still paying the monthly fee to the MCO, Sabatini said.

Mark Puente, associate vice president for Americaid, one of the MCOs, said his group had checked with some of the people who had been removed from membership, and the former enrollees had agreed they were no longer eligible.

There have been previous efforts to check Medicaid eligibility. About 12,000 people were removed from the rolls in March.