State says it overpaid 4 HMOs, wants money back $3.1 million sought, those being dunned are 'trying to understand'

Health care

September 11, 1998|By M. William Salganik | M. William Salganik,SUN STAFF

The state health department said yesterday that it had miscalculated rates and overpaid four HMOs by $3.1 million for coverage of about 2,500 people who are eligible for both Medicare and Medicaid.

The HMOs will have to pay back the money, the department said. The HMOs said yesterday that they don't have enough information to be able to evaluate the state's claims.

"We're just getting some of this information," said Alan Silverstone, president of the Northeast division of Prudential HealthCare. "We're trying to understand what's going on and why."

LaVerne Smith-Boykin, vice president for customer service and Medicaid operations for United HealthCare of the Mid-Atlantic, said United had agreed to participate in the program based on the premiums the state offered to pay. The state called this week, she said, "and we were notified, 'The rates are going to be cut in half, and, oh, by the way, you're going to have to give some dollars back.' "

The department said its consultant, the Center for Health Policy Development and Management at the University of Maryland, Baltimore County, had miscalculated premium payments.

"This is a mistake," said Joseph M. Millstone, director of the lTC Medical Care Policy Administration in the health department. "They [the consultants] included money that does not apply to the services" in calculating the premiums.

Millstone said there are about 44,000 Marylanders who, because of some combination of age, poverty and disability, are covered by both the state-run Medicaid program and the federal Medicare program. Of those, about 2,500 have chosen to join HMOs. Medicare pays most of the HMO premium, but the state pays an additional amount for services not covered by Medicare.

The rate the state pays is supposed to be 90 percent of the amount it pays in fee-for-service payments for Medicare-Medicaid enrollees who do not elect HMOs. But in calculating that amount, Millstone explained, the UMBC consultants included some payments not covered by the program.

The result of the miscalculation was a premium of $467 a month for handicapped people under the age of 65, when it should have paid $197, according to Millstone.

He said Prudential was overpaid $1.4 million for about 1,000 members, FreeState $1.1 million for about 1,000 members, United $550,000 for about 500 members and PrimeHealth $24,000 for about 25 members.

The health department pays about $6 million a year for the program. The claimed overpayments occurred from March to August.

The latest payment flap has no direct connection to another, involving payments for 330,000 people in Medicaid HMOs. Dr. Martin P. Wasserman, Maryland health secretary, told legislators July that the state had miscalculated premiums and overpaid by about $80 million, but the HMOs disagreed. The state then named a consultant to study the question and report in the fall.

Pub Date: 9/11/98

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