Maryland To Switch From Fee-For-Service To Flat Fee System for Financially Troubled Mental Health Clinics

Maryland plans to pay mental health clinics a flat fee -- instead of the current fee-for-service system -- to provide care for uninsured and underinsured patients, the Baltimore Sun reports. Clinic operators had said that the current fee-for-service rates they received from the state were too low, forcing many facilities to run deficits or close. The fiscal year 2003 budget approved earlier this month by the state Legislature would increase community mental health services spending by $42 million, bringing total spending to $446 million. The state also is planning to limit the number of "gray zone" patients -- individuals who have annual incomes too high to qualify for Medicaid but cannot afford private health insurance -- it will pay for. Beginning July 1, mental health clinics will be required to provide services to gray zone patients with annual incomes less than 116% of the federal poverty level, or about $10,000 for an individual. Gray zone patients currently receiving services at the clinics who have annual incomes higher than 116% of poverty will continue to receive treatment. However, the system will treat new patients who are above the eligibility level depending on funding availability, Dr. Georges Benjamin, the state secretary of health, said. Mental health clinic officials said that while the changes will reduce administrative costs because the facilities will not have to file individual claims, they might also deny coverage to gray zone patients who require services (Bor, Baltimore Sun, 5/17).