The state of New Mexico late last month awarded Medicaid managed-care contracts to three of four bidding HMOs: Presbyterian Health Plan, Lovelace Health Systems and Cimmaron HMO.
The three Albuquerque-based plans, which combined have about 315,000 enrollees in their commercial insurance products, will fold 200,000 of New Mexico's 250,000 Medicaid recipients into the state's new Medicaid managed-care program.
The program is called "Salud," which is Spanish for "to your health."
The contracts are valued at nearly $800 million annually, representing a large portion of the state's $1 billion-a-year Medicaid program, according to Julie M. Britti, communications director for the New Mexico human services department.
While Britti would not cite a projected cost savings figure for moving Medicaid recipients into managed care, and capitation rates were not immediately available, published reports indicate that the state anticipates up to $120 million in annual savings.
Exempt from Salud are residents of long-term-care facilities and AIDS patients.
Enrollment will begin in waves between July of this year and May 1998. It will start with Albuquerque and surrounding areas, where about 30% of the state's Medicaid recipients reside.
"Managed care is the most prevalent in this area, so this group will be the most sophisticated in terms of the issue," Britti said.
Enrollment will expand into the Santa Fe and Taos areas in October. More rural populations will be brought in at the start of 1998.
The state will handle enrollment directly. It will initially distribute enrollment materials in English and Spanish, then add Navajo as enrollment reaches the state's sizable Indian population, most of whom live in remote areas. Those who do not respond automatically will be enrolled in one of the plans.
Presbyterian, Cimmaron and Lovelace were evaluated on a 1,000-point scoring system, with points awarded for quality, depth of provider network and cost. The losing bidder, HMO New Mexico, a subsidiary of Blue Cross and Blue Shield of New Mexico, had the second-highest score on depth and quality but the lowest on cost.
Presbyterian, an affiliate of Albuquerque-based Presbyterian Healthcare Systems and the state's largest HMO with 155,000 enrollees, had the highest overall score. Cimarron actually finished fourth on depth and quality but was the lowest-cost plan.
Meanwhile, two bills are wending their way through the New Mexico Legislature that would directly affect Salud. The Medicaid Managed Care Act would require the HMOs to spend 90% of their revenues from Salud on healthcare, include some not-for-profit hospitals not yet in the proposed networks, and allow Native Americans to continue receiving services from the federal Indian Health Service.
The Patient Protection Act would require that all the state's HMO enrollees receive accurate information about their plans, prohibit physician gag clauses and set up a system for handling grievances.
The bills passed the New Mexico House on March 11, and are pending in the Senate. In published reports, Gov. Gary Johnson has said he is opposed to the bills because they would limit the effectiveness of Salud.