Optimum Choice HMO left a trail of errors as it swept along the Eastern Shore

December 12, 1993|By Patricia Meisol | Patricia Meisol,Staff Writer

SALISBURY -- Helen Hearn was relaxing in the living room of her rented house on Washington Street when a recruiter for Optimum Choice Inc., a health maintenance organization, knocked on her door. He offered her dental care, something she did not have, and promised that if she switched to Optimum Choice, she would no longer have to pay $1 for prescription drugs.

To a 53-year-old grandmother who presides over a household of eight and has no money for a phone, it sounded like a good deal. She signed up.

Only later did she learn the cost of her move: She would have to give up specialty hospitals and doctors who for years have treated her 11-year-old twin granddaughters, Mary Jo and Helen Figgs. Both suffer from cerebral palsy and arthritis.

The new insurance plan, for example, would not pay for Mary Jo's scheduled hip operation and follow-up therapy at the Kennedy Krieger Institute at Johns Hopkins, where the child has been treated since she was 3. Instead, they directed her elsewhere for treatment.

Now, an angry Ms. Hearn is returning to the health insurance plan she enjoyed as a Medicaid recipient. But while the paperwork clears, Mary Jo's operation is on hold.

"I think they should tell everybody upfront what hospital they cover," Ms. Hearn said. "I wouldn't recommend this insurance company to anyone. It's just put a strain on us, trying to figure out which way we're going to go and looking out for [Mary Jo's] health and trying to keep her out of pain."

Problems triggered by the overzealous canvassers, who were paid by the head for each person they signed up, were among a host of mistakes Optimum Choice made as it sought a foothold among Maryland's Medicaid recipients this fall. Other errors included a shortage of doctors and lost paperwork.

Optimum Choice's owner, Rockville-based Mid Atlantic Medical Services Inc., says it has fixed the problems, which it called start-up difficulties confined to one of its nine managed-care and insurance products. More than a month ago, it called back its sales force for retraining, and it is trying to mend fences.

But the effects linger. Three months after the company began recruiting welfare recipients in Maryland, it faces a blockade on the Eastern Shore by doctors angry over its tactics, its reimbursement levels and what they regard as its insensitivity to patients' needs.

In Salisbury, the Shore's largest city, most pediatricians have closed their doors to all but established patients and newborns in families insured by Optimum Choice -- or by its sister company, M.D. IPA, the largest HMO in the state.

Some doctors, including William W. Clendenen, chief of the pediatrics department at Peninsula General Hospital, are telling medical assistance patients that if they are happy with their current medical coverage, they should stick with it. And in recent weeks, dozens of people have begun the lengthy process of dropping Optimum Choice.

"The whole thing has left a bad taste in everybody's mouth," said Dr. Clendenen, who opened a practice here a decade ago after a stint with the U.S. Public Health Service. "It seemed to be aimed at numbers rather than at what's best for the patient."

Maryland, which contracted with Mid Atlantic to save money, has its own concerns. Health Secretary Nelson Sabatini plans to send Medicaid recipients letters this month telling them to check with their doctors before signing up for Optimum Choice, to avoid problems like the Hearns'.

Mid Atlantic is one of the fastest-growing managed-care companies in the nation. It has enrolled nearly 1 million people since it opened in the Maryland suburbs in 1986, and last year it reported $600 million in revenue. Its most popular plan is M.D. IPA -- a network of doctors, working in their own offices, who receive a monthly fee, whether or not a patient needs care.

The company has a reputation for innovation and for providing care at one of the narrowest profit margins in the industry -- 2 or 3 cents on the dollar. And it's known on Wall Street for producing profits quarter after quarter -- net income for the nine months that ended Sept. 30 was $13.7 million, up 57 percent over the same period in 1992.

Its strategy: finding cheaper ways to deliver health care. For example, it negotiates bargain rates with providers in exchange for guaranteeing them patients.

The state pays Mid Atlantic $1.6 million a month to handle the health care of about 7,500 people who have enrolled in Optimum Choice since it began marketing to Medicaid recipients in September.

That's 95 percent of what the state would normally pay hospitals and doctors who bill for each treatment. Mid Atlantic directs patients to cheaper services that it arranges and restricts their access to more-expensive options. By directing patients in Salisbury to a different hospital for specialty care, for instance, the company saves about 30 percent, doctors say.

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