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Featured Story October 27, 2008

Maryland Medicaid Plans Have Improved in Terms of Access and Quality, State Says

Reprinted from MEDICARE ADVANTAGE NEWS, biweekly news and analysis on the Medicare (and Medicaid) managed care programs.

By Judy Packer-Tursman, Editor, (tursman@comcast.net)

Despite state budget woes, Maryland's mandatory Medicaid managed care program is thriving with respect to access and quality of care, a state official told a recent conference in Washington, D.C. Moreover, he said the program, called HealthChoice, has served as the basis for all of the state's public health care expansion efforts over the past decade.

"Managed care has really been the platform for all of our [medical assistance] expansion over the last 10 years," including the Maryland Children's Health Program and the Primary Adult Care Program, John Folkemer, Maryland's state Medicaid director, said during a Sept. 24 presentation at America's Health Insurance Plans' annual Medicaid conference.

"We've seen significant improvement in access, quality and cost for AMERIGROUP [Corp.], Coventry [Health Care, Inc.] and United[Healthcare]," said Folkemer, deputy secretary for health care financing in the Maryland Dept. of Health and Mental Hygiene.

According to Folkemer, Maryland has conducted comprehensive evaluations over the past several years showing that Medicaid managed care organizations (MCOs) have provided a "medical home" for members and that access in most ways has improved over fee-for-service Medicaid, particularly for dental services. More recently, he said, the state has been trying to "tie access and quality into payment, so some plans get paid more and some are paid less."

Folkemer was joined by E. Mitchell Roob, Jr., director of Medicaid policy and planning for the Indiana Family and Social Services Administration. Roob said a Medicaid expansion effort called Healthy Indiana Plan (HIP) — targeting about 130,000 uninsured Hoosier adults between the ages of 19 and 64 — had received nearly 79,000 applications since its launch in January 2008. "We have 30,000 people eligible for coverage as of this week," Roob told the conference.

Indiana's HIP plan provides a "POWER" account valued at $1,100 per adult to pay for medical costs, and was designed under state law to offer a benefit package including up to $500 a year in preventive services at no cost. But Roob noted that HIP's participating MCOs — Anthem Blue Cross and Blue Shield in Indiana and MDwise with AmeriChoice (the two plans are partnering in Indiana for the purpose of offering the HIP program) — decided to expand this coverage to offer unlimited preventive care to HIP members.

Among highlights of the hour-long roundtable discussion with Medicaid directors from three states:

  • State budget challenges. Folkemer described Maryland's budget as the "No. 1" challenge for the state's Medicaid managed care program. He noted that the state will fall about $500 million short this year and about $1 billion next year, "so cuts are coming."

According to Brady Augustine, bureau chief of Medicaid health systems development for the state of Florida, "We've cut the [Medicaid provider payment] rates about as far down as we can cut them without having access problems." As part of the solution in a challenging fiscal period, he said it is necessary to transform Medicaid "from a passive payer to an active purchaser of quality care."

He noted that Florida will stop Medicaid plan marketing as of January 2009 and institute performance-based assignment of enrollees. "States are relying on plans to innovate and create flexible programs," he said.

  • Further challenges. "We have problems with provider participation, generally and for Medicaid," Maryland's Folkemer said. "Rates, prior authorization and administrative requirements are problems…though MCOs are more successful in network building." He also cited "antiquated management information systems, and a steady erosion of private insurance, which has moved people into public [health insurance] programs," noting there has been about 50% enrollment growth in the Maryland State Children's Health Insurance Program (SCHIP) and Medicaid program over the past 10 years.
  • Risk-adjusted rate-setting. Although Maryland's seven Medicaid plans use a "collaborative, data-driven approach" in working with the state on rates, the state's risk adjustment resulted in a wide variation in rates in 2007, Folkemer said. While the state paid an average of $318 per member per month (PMPM) for all managed care enrollees in 2007, he said, the amount ranged from an average of $278 PMPM to $536 PMPM among the plans due to extensive risk adjustment and a widely varying patient mix. He noted that the state created separate rate cells for infants, people with disabilities, and people with HIV and AIDS. The state also separates Baltimore city from the rest of the state for rate-setting purposes, he said.

Maryland began a voluntary Medicaid HMO program in the 1970s, got involved in primary care case management (PCCM) and then shifted to mandatory Medicaid managed care in 1997, Folkemer said. HealthChoice requires about 80% of Medicaid and SCHIP eligibles to enroll in one of the seven participating MCOs, including four "home-grown" plans.

 

 

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