ANNAPOLIS – Health care experts warned lawmakers Wednesday that Health Choice, Maryland’s largest Medicaid program, is in danger of collapse if it doesn’t get more money soon.
“It sounds like we’re getting ready to blow the engine on this whole system,” said Delegate James W. Hubbard, D-Prince George’s.
Hubbard was responding to testimony from health care professionals who told the House Environmental Matters Committee that more money for doctors’ fees and administrative costs is sorely needed.
“Funding for this whole program is inadequate,” said Eric Wagner, president of Helix Family Choice, one of six managed care organizations working with Health Choice.
The criticism dominated what began as a review of the Department of Health and Mental Hygiene’s evaluation of the 5-year-old Health Choice program. The evaluation started in January and will be completed by December.
But, health care representatives emphasized, evaluating the program is not as important as keeping it afloat through next year.
“Money is the real issue here,” said Michael Preston of MedChi, the Maryland physician’s organization. “Indeed, the evaluation may become irrelevant in light of the funding issue.”
Health Choice serves about 80 percent of the state’s Medicaid population, or about 420,000 people, according to Office of Health Services Executive Director Susan Tucker.
The program began in 1997 to provide Medicaid recipients with managed care, which is considered an effective way to provide preventive health care and non-hospital services like childbirth education and special-needs case management.
“We’ve found most physicians’ groups are very happy with (managed care) because the burden of care gets taken off of hospitals,” said Michael Johansen of Maryland Physicians Care.
Federal rules require Maryland to ensure recipients enrolled in Health Choice have at least two managed care choices in their region. Recently, though, managed care companies have been leaving the program or refusing to take new patients because they say they aren’t receiving the money they need to stay in business.
One more managed care group’s defection or patient refusal will mean the state will have to revert to a “fee-for-service” system to cover new Medicaid recipients. That system doesn’t handle special needs or preventive health, MedChi doctors say.
The funding problem is caused by payment rates the state sets for member organizations and their physicians. While the rates are adjusted every year to account for cost increases since 1997, before Health Choice was established, they were too low to begin with, the critics charge.
“The system is grossly underfunded,” said Jan Schmidt, spokeswoman for Advocates for Children and Youth, adding physician fees are “antiquated.” A MedChi report submitted to the committee called them “unconscionably low.”
“There’s just no question that the Medicaid system is in crisis,” said Easton pediatrician Fayette Engstrom.
The situation is so bad, Engstrom said, that many pediatricians who accept patients on Medicaid would themselves qualify for state assistance if they had any more children of their own.
Many Eastern Shore specialists have left the program, she said, and virtually no dentists serve the Eastern Shore’s Medicaid population.
“Frankly, providers of all kinds are finding if their business goes bankrupt, they can’t be providers for anybody, let alone Medicaid patients,” said Engstrom, who testified with the Advocates for Children and Youth.
Last spring, the General Assembly ordered DHMH to adjust the way it calculates reimbursement rates so that Health Choice managed care groups can remain competitive.
Until then, managed care companies are asking for increases up to $30 million for 2002 to provide sufficient reimbursement to their doctors.
But Hubbard, a bill sponsor, said the DHMH budget is under Gov. Parris N. Glendening’s control.
“What this program needs is a $60 (million) to $70 million infusion,” Hubbard said after the meeting. “The reasonable expectation is that this program will survive only because these six (managed care organizations) want to make a difference.”
Mike Morrill, Glendening communications director, said spending increases can’t be expected in the current economic climate.
“The governor’s been very clear for a couple of months now that we’re not going to see significant new expenditures,” Morrill said. “There was a lot of money poured into this program this year, in this year’s budget, to allow for higher rates.”
That will just mean the Health Choice problem will get passed to the next governor along with other burgeoning economic problems, Hubbard said, adding, “I hope they’re ready to make some billion-dollar cuts.” – 30 – CNS-9-26-01