Md. acts to raise Medicaid rates

2 managed care firms object to allocation for MCOs in rural areas

November 10, 1999|By Shanon D. Murray | Shanon D. Murray,SUN STAFF

A Maryland General Assembly joint committee approved new Medicaid rates for next year yesterday, adding $40.9 million to the $840 million paid annually to the state's eight managed care organizations.

While six of the eight managed care organizations agree with the new rates, two dissent, saying they disagree with a $6.2 million allocation for MCOs serving rural counties.

MedStar Health, one of the dissenters, said it will "look closely" to see if it can continue to adequately serve Baltimore and its five surrounding counties under the new rate structures.

Under a 2-year-old program called Health Choice, the state health department pays monthly premiums to Maryland's eight managed care organizations, which then pays for whatever care is needed.

The Medicaid program provides health insurance for about 350,000 Marylanders, mostly low-income women and children.

The General Assembly's Joint Administrative, Executive and Legislative Review Committee decided to forgo hearings and to accept the state health department's proposal.

"In developing this proposal, we worked very closely with the health plans to understand their particular issues," said Debbie I. Chang, health department deputy secretary. "We developed this proposal to make health plans viable and to improve the program overall."

Eric R. Wagner, vice president for managed care at MedStar Health, said the one piece of the plan that did not address his company's issues was the allocation for MCOs serving rural counties.

Amerigroup, which also opposes the plan, was not available for comment late yesterday.

The plan calls for increased rates in 10 counties -- eight on the Eastern Shore and two in Western Maryland -- where there are three or fewer MCOs. MedStar is active only in the Baltimore metropolitan area.

"We are not beneficiaries of any additional dollars because we don't operate in any of those territories," Wagner said. "But we face those same cost challenges in some of the counties where we do operate, most notably Baltimore and Harford counties.

"We are committed to serving our patients, but we'll watch our operations closely. We may have to make some adjustments" to its operations in the city or any of the five counties it serves, he said.

The rate change allows CareFirst BlueCross BlueShield to stay in the Health Choice program statewide, said Lorraine Doo, the company's Medicaid director.

With 20,000 members on the Eastern Shore, she said "if we had pulled out, it would have brought [Health Choice] to a very precarious position."

Chang said all of the plans benefit, but in varying degrees, adding that the six MCOs that support the new rates "represent 70 percent of Health Choice's enrollment."

She said the state health department looked at different counties, and found that there were some that did not have as many participating plans.

While all eight MCOs operate in Baltimore County, the department decided to give additional funding to counties where it wanted to make sure there is competition and plan choice, Chang said.

The total additional funds include: $23 million for inflation; $4.7 million for dental care; $4 million for HIV patients; $6.2 million for rural counties with three or fewer MCOs; and $3 million for treating pregnant women.

The new funds will expire December 2000, Chang said.

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