State seeks to protect Medicaid recipients Md. reviews plans to ensure coverage for PrimeHealth clients

March 16, 1998|By Walter F. Roche Jr. and Scott Higham | Walter F. Roche Jr. and Scott Higham,SUN STAFF

Maryland officials say they have reviewed contingency plans to ensure about 12,300 Medicaid recipients will keep health coverage and that their medical bills will continue to be paid if the operating license for PrimeHealth Corp. of Lanham is revoked.

Martin P. Wasserman, the state's health secretary, said the contingency plans were discussed last week in a meeting between his agency and state Insurance Commissioner Steven B. Larsen, who has given PrimeHealth until Wednesday to begin answering a series of detailed questions about the company, its ownership and its debts.

Wasserman said Friday he hoped the questions posed by Larsen would be resolved. He said he is satisfied that the contingency plans would ensure that those Marylanders on Medicaid served by PrimeHealth would continue to have health care coverage. He said the plans also would ensure that bills for hospitals, physicians and other health care providers would be honored and paid.

"We [hope] that PrimeHealth will be able to respond successfully," Wasserman said, adding that he did not want to bias the outcome of the review by the Maryland Insurance Administration. He would not elaborate on the details of the contingency plans, but indicated that other managed-care firms would be able to absorb PrimeHealth's caseload.

Larsen's review of PrimeHealth was triggered by dual investigations stemming from the ouster of Larry Young, a West Baltimore Democrat, from the state Senate.

Young, who was expelled from the Senate in January, had met at least three times with top state officials to urge that PrimeHealth get a contract to serve Medicaid recipients under a new mandatory managed-care program called HealthChoices.

Larsen, in an eight-page March 11 letter to PrimeHealth President Edward A. Thomas, warned that the questions "are of the utmost importance and require a prompt resolution."

He charged that PrimeHealth officials had given highly conflicting statements on the same day, March 5, about the ownership of the company.

"In response to specific questions, and in a sworn statement, you have provided me with conflicting information as to the basic structure and ownership of Prime- Health," Larsen wrote in his letter to Thomas.

Larsen acknowledged Friday that state officials don't know who owns PrimeHealth even though the state issued the firm a license more than a year ago. He said his agency has not previously revoked the license for a health maintenance organization. However, that is one of the possible outcomes of the review.

In addition to questions about the ownership of PrimeHealth, Larsen said he has major concerns about whether the company disclosed that an affiliated firm, Diagnostic Health Imaging Systems, had substantial debts including state, county and federal tax liens. DHIS donated its assets, including X-ray equipment, to meet minimum state requirements for a license.

Larsen warned that if that equipment were to be excluded because of the DHIS debt, "PrimeHealth would not meet current solvency standards."

Larsen said he has not had time to determine whether his agency's review procedures need to be tightened to prevent a recurrence of the PrimeHealth situation.

"I am committed to finding out if we need to tighten our procedures," he said.

Pub Date: 3/16/98

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