WASHINGTON – About 40,000 Maryland Medicaid enrollees and their doctors can breathe a sigh of relief.
The Department of Health and Mental Hygiene said Wednesday that Maryland Physicians Care will assume coverage for those patients who are scheduled to lose their current FreeState Health Plan on April 1.
The decision lets patients keep their doctors and allows the state to preserve managed care rather than revert to a potentially costly fee-for-service arrangement, officials said.
While the arrangement requires the state to assume some financial risk, many officials said they are satisfied.
“From my point of view as a provider, I’m ecstatic,” said Dr. Charles Shubin of the state’s Medicaid Advisory Committee. “From the point of view of the patients, it’s terrific. . .they don’t have to do anything.”
Debbie Chang, the deputy secretary of Health Care Financing, said she was very pleased Maryland Physicians Care stepped up to the plate, a move that will allow current FreeState members to “stay with their primary care providers.”
Patients will be able to keep their current doctors because the three medical groups serving most of them — the University of Maryland Medical Center, Mercy Medical Center and Total Health Care — have agreed to participate in the arrangement, officials said.
The state has agreed to assume some financial risk by paying Maryland Physicians Care for any financial losses incurred by taking these patients. But Chang said she expects the deal to be “budget neutral — or negligible.”
The state currently reimburses many Medicaid managed care organizations on a “capitation” basis, in which they are paid a set fee based on how ill a particular patient is. People with sickle cell anemia, for example, have higher reimbursement rates than healthier patients.
The deal with Maryland Physicians Care calls for it to be paid according to the FreeState patients’ previously assigned rates. If it ends up costing more to treat those patients, the state will make up the difference. If it costs less, the deal requires Maryland Physicians Care to pay the state.
FreeState pulled out of Maryland’s Medicaid program in most of the state on Jan. 1, citing financial losses. It then announced that it would drop coverage on April 1 for its remaining patients, in Baltimore and Baltimore County.
Patients affected by the earlier pullout were assigned to other managed care organizations in what the state called a smooth transition. But the remaining patients posed special problems for officials trying to find them a “medical home.”
Health care advocates said many of these patients need more medical care on average than recipients elsewhere in the state. And officials said that, for a variety of reasons, reimbursement rates have been set too low.
“In this case you’ve got a situation where. . .the amount of revenue for these folks is not right, it’s not high enough,” said Barbara Spence of United Health Care’s Family First, one of the seven remaining managed care organizations accepting Maryland Medicaid patients.
The state could find a way to reduce the financial risk for managed care organizations, or resort to a traditional fee arrangement in which individual doctors get reimbursed for each service provided, something it did not want to do.
“Can I predict what would have happened? No, but it wouldn’t have been good,” said Shubin. “It would have destroyed the managed care concept.”
Some health care advocates say they are heartened by the state’s efforts to provide continuity of care, but they warn that Maryland Physicians Care might be ill prepared to handle the burden of doubling its size in less than two months.
They noted that phone lines were jammed and doctors could not get through to Maryland Physicians Care in January, when it took on 11,000 patients from the first FreeState pullout.
“The fact that they have a history of administrative problems, we’re just concerned that this could be the straw that broke the camel’s back,” said Laurie Norris of the Public Justice Center.
Don Blanchon, chief financial officer of Maryland Physicians Care, attempted to allay these concerns.
“We recognize that there were times when the wait times were less than optimal. I can tell you we have learned from that experience,” he said. “That stuff is all fresh in our minds.”