State wants all Medicaid patients in HMOs

April 16, 1995|By Diana K. Sugg | Diana K. Sugg,Sun Staff Writer

State health officials are planning a major change in the way nearly half a million poor Marylanders get their health care.

For years, a small number of these patients, mostly women and children, voluntarily have enrolled in health maintenance organizations. A larger number go to designated primary care doctors who coordinate care.

But with the help of legislation passed last week, health officials want to require all Medicaid patients to be in HMOs.

By moving to managed care, officials believe they will save enough money to cover roughly 100,000 additional people. That is only one-sixth of the state's uninsured population, but it would mean many working people who don't have health insurance could get basic health care.

The strategy is a common one for states around the country struggling with soaring Medicaid costs and rising numbers of uninsured people.

Medicaid, the federal-state health program for the poor, has been the fastest-growing item in state budgets, accounting for roughly 18 percent of states' total expenditures. Poor women and children, along with elderly, blind and disabled people, get their health care through it.

In Maryland, the Medicaid budget has doubled over the last six fiscal years, reaching $2.1 billion. And roughly 115,000 more people lost their health insurance in 1993, the most recent year for which figures are available.

In the private market, the desire to lower costs is pushing change. Moving people into managed care is becoming the rule. Hospitals are restructuring staffs. Companies are dropping the familiar indemnity plans that allowed workers to choose their doctors and see them whenever they wanted.

For states, shifting patients into managed care can be controversial, but its promise is appealing.

By putting everyone in HMOs, officials hope to stop unnecessary use of emergency rooms and shorten hospital stays. The resulting savings can amount to 5 to 10 percent, according to national studies.

But the plan must be approved by the federal government because it means bypassing some regulations. So far, nine states have been granted waivers to try similar experiments. Nearly a quarter of all Medicaid patients nationwide are enrolled in some kind of managed care, a 57 percent increase over 1993, figures show.

To strengthen their case, Maryland officials won the General Assembly's approval to seek a federal waiver even though legislative backing is not required to apply for one. Lawmakers passed a bill sponsored by Sen. Paula C. Hollinger, a Baltimore County Democrat, that also put in place key safeguards. The state health department, for instance, would hold HMOs accountable for making sure that children get immunizations and women get mammograms.

After vociferous criticism from community clinics and hospitals that have cared for these patients and feared they would lose the patients to HMOs, the bill was amended to address their concerns. These so-called "essential providers" would be able to form managed care networks, essentially acting as HMOs to compete and care for the patients.

The legislation calls for a broad-based steering committee to work out crucial details in the coming months.

The law also gives the state health department expanded enforcement powers. Now, the department can take steps such as suspending further enrollment and withholding payments to HMOs that fail to abide by their contracts. Under the new legislation, that authority may include fines.

Even with penalties, some questioned whether the state should turn over such a huge program to HMOs, many of which have a profit motive.

"How much of the savings are going to be on the backs of the Medicaid patients, who are going to get less care? . . . I don't see how you're going to control insurance companies from making excessive profit," commented Del. Leon G. Billings, a Montgomery County Democrat, at a recent hearing.

Dr. Martin P. Wasserman, the state's health secretary, responded: "We're not in here to increase the profit of an HMO. We're here to provide the best quality care for the recipients."

Now, only a quarter of the state's 467,000 poor patients are in HMOs. Another 45 percent are in a loosely structured gatekeeper system. The rest are still able to go to doctors without restrictions.

For Baltimore patients like Carole McCarthy, the new way is working.

"Before, it was like you took a back seat to everyone else," said Ms. McCarthy, 49. She said doctors "were more worried about the patients who were paying" and complained that she couldn't see the same doctor twice. Now, at the Highlandtown Community Health Center, she has a doctor she loves. She gets flu shots every winter, so she doesn't get pneumonia.

According to state officials, the gatekeeper system she is in, called MAC -- for Maryland Access to Care Program -- will become more like an HMO, with stricter controls on referrals.

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