As Indiana healthcare providers wrestle with newly imposed Medicaid payment methods, a managed-care-style approach has gained some takers.
Three hospitals and Healthsource, an HMO, have formed a capitated delivery network for Medicaid patients in Indian-apolis and the rest of the state's central region. The Indianapolis hospitals involved are 928-bed Methodist Hospital of Indiana, 323-bed William N. Wishard Memorial Hospital and 596-bed Indiana University Medical Center.
"This is the first contract awarded in the state's effort to cover Medicaid recipients in three regions," said Robert Morr, vice president of the Indiana Hospital Association. "The state didn't get proposals that met their specifications in the north and south parts (of the state) but they should be worked out."
In part, the risk-based Medicaid managed-care plan will help Indiana hospitals deal with more than $160 million in cuts from reforms. The reforms included reducing hospitals' Medicaid reimbursements to 85% from 100% of Medicaid costs.
For the last six months, IHA has been awaiting U.S. District Judge Larry McKinney's ruling on the fairness of the new Medicaid payments. Judge McKinney presided over an April trial for the IHA, which sued the Indiana Family and Social Services Administration as well as the Indiana Office of Medicaid Policy and Planning (May 30, p. 17).
Gov. Evan Bayh's proposed $490 million in Medicaid cuts are targeted for the two-year budget period that ends June 30, 1995.