Maryland last week became the 14th state to gain approval from HCFA for a waiver of standard Medicaid program requirements, allowing it to move ahead with a plan to enroll about 75% of its 440,000 Medicaid beneficiaries into managed-care plans.
In an exhaustive process that included 17 public hearings, six focus groups of Medicaid recipients and deliberations of a 130-person advisory committee, the state General Assembly in April approved legislation setting out several experiments in Medicaid coverage and reimbursement. The waiver application was filed May 3.
About 25% of Medicaid beneficiaries already are voluntarily enrolled in managed-care plans. Another 50% participate in a state-operated fee-for-service case management system, HCFA said. Participants in that state program will be able to stay with their current primary-care doctors as long as those providers are part of a participating managed-care plan.
With federal approval in hand, the state Department of Health and Mental Hygiene is pushing for a Jan. 1 start-the halfway mark in Maryland's fiscal year-so the state can begin reaping a predicted savings of $19 million by June 30 as a result of the program's prevention-oriented focus.
Maryland's Medicaid budget for fiscal 1997 is about $2.5 billion, evenly split between federal and state funding.
But first a joint legislative and executive committee must approve a 300-page set of regulations and complete an actuarial analysis of program costs that form the basis for computing capitation payments to managed-care plans, said Pegeen Townsend, the Maryland Hospital Association's vice president for legislative policy.
The association and other stakeholders in the program are concerned that a Jan. 1 start doesn't leave adequate time for managed-care plans to determine whether to apply, then negotiate and complete agreements with healthcare providers.
In addition, Townsend said, "there has been zero-zero-education of the enrollees."
The point behind moving Medicaid participants to managed care is to change their behavior when it comes to minding their health and seeking medical services, she said. "If you want to change behavior, you better let them know that change is coming," she said.
The state is also planning a mental health program delivered through a partnership of public and private agencies. About 25% of Medicaid recipients are receiving long-term care for mental disorders or handicaps or are in nursing homes. Those populations aren't included in the managed-care initiative.
Other innovations include a rate-setting system that adjusts financial risk according to the diagnoses of individuals enrolled by managed-care plans.