Institutions prepare for managed care Providers who give specialized aid in Medicaid scramble

November 17, 1996|By M. William Salganik | M. William Salganik,SUN STAFF

Institutions that have been providing specialized services for Medicaid patients are scrambling to find their place in a new world as the state prepares to shift 400,000 Medicaid patients into managed care plans.

From the large -- the $85 million-a-year Kennedy Krieger Institute for children with disabilities -- to the small -- the $3 million-a-year Center for Addiction and Pregnancy at Johns Hopkins Bayview Medical Center, providers that deal with niche segments of the Medicaid population are facing uncertainty.

Their ability to craft managed care contracts with insurers will determine whether they can still provide their services and how much they will be paid to do so.

"Everybody is trying desperately to sort out what this all means and what they need to do to keep alive in the system," said Sana F. Shtasel, chief executive of Planned Parenthood of Maryland.

Some, based on preliminary discussions with health maintenance organizations participating in Medicaid, feel confident they will be able to negotiate agreements but are uncertain about the financial terms.

"It will probably fall 20 to 30 percent short of what we currently get," said Jacquelyn Gaines, head of Health Care for the Homeless, which operates four clinics and also provides services at soup kitchens and shelters. "We're trying to find other streams of revenue." Already, about a quarter of her $3.5 million budget comes from private grants and fund raising.

Other providers are looking to become part of new managed care organizations formed under the rules of the new Medicaid program. But even these are looking to deal with other HMOs.

"We'd like to be represented in as many networks as possible," said David Shippee, executive director of Chase Brexton Health Services in Baltimore, which specializes in treating AIDS and HIV-positive patients. "Our ability to be included is critical."

And others are unsure whether HMOs will contract with them at all.

Dace Svikis, director of the Center for Addiction and Pregnancy, recalled an all-day Medicaid "vendor fair" last month -- a sort of mixer set up so providers could meet HMOs and begin relationships. "The pediatrician from my program had one conversation with Prudential, but other than that, we just sort of stood there," she said.

The HMOs say they are eager to deal with providers that have experience in dealing with the particular conditions and sets of problems their new enrollees will bring.

"We're real worried about special populations," said Leon Kaplan, chief executive of Chesapeake Health Plan. "We're convinced we need to partner with the right set of providers who are used to managing those conditions. We'd like to get the Kennedy Kriegers of the world to contract with us."

In addition to expertise and experience, the HMOs are seeking providers with whom their enrollees are comfortable, said Lorraine Doo, director of Medicaid for Blue Cross Blue Shield of Maryland, whose FreeState Health Plan is participating in the the Medicaid program.

Thus, she said, although FreeState has providers that can do family planning, she wants to contract with Planned Parenthood "because they are a trust site. It's important to have network sites where people want to go and will go."

Although more than 100,000 state Medicaid recipients are in HMOs already, most receive care on a fee-for-service basis. In an effort to save money and assure good care, the state is shifting most of the rest, primarily mostly women and children on welfare, into HMO-like managed care plans within a six-month period beginning Feb. 1.

All the patients will have a primary doctor affiliated with one of the managed care organizations. "That's the glue that held this program together," said Dr. Martin P. Wasserman, state health secretary. "This was to be patient-centered, and patients were to be cared for in a medical home. We pay reasonable amounts of money, and we hold the single entity responsible for providing care."

Thus, providers such as Kennedy Krieger (which gets about 70 percent of its annual patient revenue from Medicaid, since most of its patients qualify as disabled), must work through HMOs to receive patients.

Even when HMOs and providers are eager to get together, they're learning new ways of relating.

"In the first five minutes of the conversation, we both acknowledge there isn't enough money to do it the way it used to be done," said James M. Anders Jr., administrator and chief operating officer of Kennedy Krieger, of his conversations with HMOs.


Kennedy Krieger hopes to develop contracts based on capitation -- a flat rate per patient, based on diagnosis. Anders said he believes his institution can manage care, spending on early therapy that might reduce costs later. That way, he said, needed care can be provided with the dollars available.

HMOs generally like capitation, which shifts risk to the providers. But they are wary about capitation contracts with specialty providers as part of the Medicaid shift.

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