Maryland Medicaid HMOs Ask State for Increased Reimbursement Rates Next Year

Maryland Medicaid HMOs must decide by Oct.1 whether they will cover beneficiaries next year, and on Sept. 26, several state HMOs said that they may "limit or drop" their participation in HealthChoice, the state's Medicaid managed care program, on Jan. 1, the Baltimore Sun reports. During a state House Environmental Matters Committee hearing, representatives of several HMOs said the state health department must add $20 million in state and federal funds to HealthChoice "on top of already-recommended increases" to "keep the program going smoothly." Eric Wagner, president of HMO Helix Family Choice, said, "The funding for the whole program is inadequate. It could lead to exits (by HMOs), haphazard returns to fee-for-service and disruptions to patients." Debbie Chang, Maryland's deputy health secretary, said that the state plans to increase HMO reimbursement rates by 8%, or $80 million, next year, adding that the state has a "contingency plan" to treat some patients on a fee-for-service basis "if there aren't enough participating HMOs." However, HMO representatives said that the state will only boost rates 3% to 5%, less than the 8.3% increase in medical costs that the state health department has estimated. Wagner said that the rate increase represented a "miscalculation" and smoke and mirrors." Members of the state House committee also fear that next year's reimbursement rates "were not sufficient to keep HMOs and doctors in the program." State Del. John Hurson (D) said, "I think we've got a real problem. If you start losing providers, the system reverts to fee-for-service, and that basically means we've failed." Hurson said that legislators cannot modify the proposed rate increase. However, he urged the state health department decides to boost reimbursement rates for HMOs, adding that the state Legislature would likely provide funding for the increase in January. In addition to increased reimbursement rates for HMOs, state Health Secretary Dr. Georges Benjamin said that he hopes to boost reimbursements that doctors receive from HMOs to address a "shortage of participating physicians" in some parts of the state (Salganik, Baltimore Sun, 9/27).