Maryland HMO Strikes Deal With State to Cover 40,000 Medicaid Managed Care Beneficiaries

Maryland Physicians Care, an HMO owned by four Maryland hospital systems, has agreed to provide coverage for 40,000 Medicaid beneficiaries who will lose coverage this spring when CareFirst BlueCross/BlueShield exits HealthChoice, the state's Medicaid managed care program. The Baltimore Sun reports that under the deal, MPC will enroll all 40,000 members of CareFirst's FreeState product and will add all of the FreeState physicians and hospitals to its network to ensure that enrollees will not have to switch doctors. In return, the state will assume the financial risk for the patients for the rest of the year and will also reimburse MPC for any costs incurred that "excee[d] the rate the state usually pays HMOs." However, if the cost of care is less than the regular rate, MPC will return the money to the state. Donald Blanchon, CFO of MPC, said that while his group was "reluctant to be at risk for providing care at the same rates paid to FreeState," it did not wish to see "large numbers of people" shifted over to a fee-for-service system. He added that MPC would add staff and ensure that it had "adequate information systems" to accomodate the large influx of members. The move nearly doubles the size of MPC, which currently has 43,500 members. State officials said that the MPC deal was necessary to save Maryland's Medicaid HMO program. "Without this, the whole HealthChoice program could have folded," Dr. Charles Shubin, a pediatrician and a member of the state's Medicaid advisory committee, said. Debbie Chang, state deputy health secretary, said that the cost of the agreement to the state would be "negligible," adding that MPC would likely operate with lower administrative costs than FreeState. Health and consumer advocates were also "generally pleased" with the deal, as the plan will allow all former FreeState enrollees to stay with their doctors. FreeState will exit HealthChoice on April 1 (Salganik, Baltimore Sun, 2/15).