ANNAPOLIS, Md.-Maryland would expand enrollment of Medicaid recipients in managed-care plans under a proposal the General Assembly is expected to consider soon.
The plan put forth by the state's Department of Health and Mental Hygiene could nearly triple the state's Medicaid managed-care population to as many as 350,000, or all the state's beneficiaries except for those in state institutions or nursing homes. The state has 467,000 Medicaid recipients, of whom 115,000 to 120,000 are already in managed-care plans.
Under the proposal, additional Medicaid beneficiaries would begin enrolling in managed-care plans in January 1997, with the hope of saving about $19 million from a projected state Medicaid budget of $2.3 billion in fiscal 1997, which begins July 1. Half Maryland's Medicaid budget is funded by the federal government.
Savings are expected to be four times greater in subsequent fiscal years.
Martin Wasserman, M.D., the state's secretary of health, said the state will channel enrollment into managed-care plans to prevent adverse selection of less healthy, more costly populations.
The state would seek to enroll those beneficiaries in plans with a focus on primary and preventive care, Wasserman said, as well as insisting that plans enrolling Medicaid beneficiaries devote 80% of the revenues they receive from the state to patient care.
Provider-run networks would be eligible to form managed-care organizations that will contract with states to serve the Medicaid population, he said, particularly in underserved inner-city areas.
Wasserman said the restructuring is needed at a time when future federal Medicaid payments are jeopardized by possible spending growth restraints imposed by Congress.
"We think that by doing it, we will get more value for the state's expenditure and we will get more predictability for the state's expenditure," Wasserman said.
State lawmakers could begin debating the plan later this month.
Although provider groups have not been given full details of the state's plan, the Maryland Hospital Association is urging the state to use caution in how it implements the proposal, said association spokeswoman Nancy Fiedler.
For instance, Fiedler said, enrolling disabled or chronically ill nursing home residents in managed-care organizations is not a good idea until providers have a better idea of how to manage their care.
"Our preference would be clearly to move toward capitation on some of the more manageable populations," Fied-ler said.
Furthermore, Fiedler said she hopes specialized rehabilitation and long-term-care facilities treating the disabled will have the same opportunities to contract directly with the state. Today, she said, those facilities are not able to cover the disabled as managed-care organizations, which could "disenfranchise" those providers.
She added that providers also are concerned that Medicaid reform doesn't simply become a way to save the state money.
"The original plan was to be able to broaden service to those not eligible for Medicaid. Originally, they were going about it the right way," she said. "The hope now is that it will allow some savings to keep the program whole*.*.*.*but still puts managing care ahead of the costs."
The Maryland plan comes as governors from both parties, Congress and President Clinton are attempting to limit both state and federal Medicaid spending growth through a number of proposed mechanisms.
In their balanced-budget bill that passed Congress in November, Republican congressional leaders, backed by many governors in their own party, supported reining in federal Medicaid spending growth from 7.5% between fiscal years 1995 and 1996 to 4.2% between fiscal years 2001 and 2002, saving $133 billion when compared with current law.
The GOP plan proposed to do so by giving the federal share of Medicaid to the states in the form of lump-sum payments called "block grants," with few strings attached.
Clinton, meanwhile, argued for about $52 billion in savings, partly by capping spending growth on a per-person basis.
In negotiations, congressional Republicans have since reduced their Medicaid savings offer to about $85 billion and President Clinton has raised his savings total to $61 billion, although how to restructure federal payments has remained a far thornier issue in the negotiations.