In a unique experiment forced by economic circumstances, Maine has dropped a firm that managed its Medicaid managed-care plan and is training welfare recipients to enroll the poor in the program.
Beginning Jan. 1, Foundation Health Systems will no longer serve as the state's health benefits adviser. FHS' $1 million annual contract has been scrapped in favor of putting welfare recipients to work doing the jobs of 30 FHS staff members, who will be laid off.
FHS "did a good job, but it was expensive, and our managed-care program is not rolling out as quickly as we had hoped," said James Gorman, deputy director of the state Department of Human Services' medical services bureau.
When the state hired FHS in July 1996, it hoped to enroll 100,000 Medicaid recipients in a mandatory managed-care program. But only one HMO -- NYLCare Health Plans of Maine -- stepped forward to serve that population, Gorman said.
Under federal law, in order to keep the program mandatory, the state had to offer a choice of HMOs. With only a voluntary program, NYLCare serves just 4,700 of the 17,000 Medicaid managed-care enrollees in the state. The rest are in a state primary-care case management program.
Although several commercial HMOs operate in the mostly rural state, they were reluctant to take on Medicaid recipients.
"They don't think the market is large enough and are unwilling to take the risk; a couple of bad cases and they would be in trouble," Gorman said.
Besides, the state has been slow to adopt managed care, "so providers aren't lining up" to participate, he said.
Only 15% to 20% of Maine's 1.2 million residents are in any kind of managed-care plan, he said.
NYLCare has had an insurance presence in the state for 45 years through its parent, New York Life Insurance Co., said Dan Fishbein, M.D., president of NYLCare's Maine plan, which offers a commercial HMO and a PPO with a total of 60,000 enrollees.
"We participated (in the state's managed-care program) because we're committed to building our presence in Maine. Serving all populations was a critical portion of our ability to grow our total membership. The (Medicaid) program did not have to be an exceptional profit opportunity," Fishbein said.
NYLCare expects its Medicaid program will break even next year.
The decision to use welfare recipients as enrollment officers was a natural one, state officials said. After dropping FHS, it had to self-administer the program. And it had 11,000 welfare recipients it had to find jobs for under the new welfare reform laws.
"The Medical Services Bureau said, `What a great opportunity,' " said Judy Williams, acting director of the Bureau of Family Independence, part of the state's human services department.
Residents receiving Temporary Assistance for Needy Families "could become real viable candidates for this work force," she said.
Officials also believed that the welfare recipients "would relate empathetically to people who were calling in" with questions about Medicaid managed care, Gorman said.
A training program was set up with assistance from FHS, and 30 to 40 welfare recipients are beginning to receive training in areas such as computer operation, telephone answering skills and medical terminology. While they are training for about 26 weeks, they are still receiving welfare benefits, which total $418 per month for a household of three, Williams said.
They receive about $40 a week more while they're in training. Once they're hired by the state in January, they'll make about $8 an hour and keep their Medicaid benefits and perhaps food stamps, Gorman said.
The trouble is, welfare recipients being trained by the state keep getting hired away, Gorman said. "And for our marketplace, they're quite good jobs," he said. For example, one was hired by a pharmaceutical company to answer customer questions.
Marion Reitz, vice president of Medicaid Administrative Programs for FHS, which administers Medicaid programs in four other states, said, "We're disappointed we're losing the contract but we can understand the situation they're in. The program never took off."
Reitz thinks hiring welfare recipients is an interesting experiment, and she thinks it will work. In all states where FHS administers Medicaid programs, "we make a commitment that we'll try to hire welfare recipients and train them," she said. Currently, 25% to 35% of FHS' staff in those states are welfare recipients that FHS has trained, she said.
Critics of Maine's program include community-based organizations that had the same objections when FHS was awarded the Medicaid administration contract, Reitz said. Advocates for the poor are concerned that their rights are protected, she said.