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June 14, 2004

Conference Examines Cost-Effective Medicaid

Nelson Sabatini, Maryland’s Secretary for the Department of Health and Mental Hygiene, said the State is facing a crisis in its ability to fund Medicaid in the future, which provides health care services to many of the poor and disabled. “The state has to do something, because the current program is not working,” he said.

The Secretary’s remarks came during a scientific conference examining his proposal for more cost-effective Medicaid, which was held June 10 at the Johns Hopkins Bloomberg School of Public Health. The conference was organized by the School’s Roger C. Lipitz Center for Integrated Health Care, which is led by Chad Boult, MD, MPH, MBA, professor of health policy and management. The conference was attended by nearly 300 representatives from health care providers, nursing homes, consumer groups, universities, government administrators, community agencies, insurance companies and the state legislature.

Like many states, Maryland is searching for a cost-effective way to provide health care to residents who are dually eligible for both Medicare and Medicaid and to disabled residents who receive Medicaid only. About 70,000 Marylanders meet these criteria, and many of them are low-income, elderly and disabled. In addition, dually eligible and disabled Medicaid recipients often require long-term care services at home or in nursing homes. These services account for 68 percent of the state’s $1.3 billion annual Medicaid spending for this group.

Secretary Sabatini explained that health care for this population is uncoordinated, fragmented and complex. He outlined a proposal to make capitated payments to “community care organizations” that agree to provide these Medicaid recipients with the acute and long-term care benefits covered by the Medicaid program. Each participating community care organization would contract with rehabilitation facilities, home care agencies, hospitals, physicians, nursing homes, pharmacies and others to provide the covered acute and long-term care services for the people enrolled in its plan. Sabatini said the proposal would provide alternatives to institutional long-term care and would control the growth in spending.

Sabatini also explained that the state legislature passed a “dually eligible waiver” bill earlier this year, but it was vetoed by Governor Robert Ehrlich. Governor Ehrlich stated in a letter to the legislature that the measure could reduce access to care because it would prohibit community care organizations from negotiating competitive rates with nursing homes and day care facilities. In addition, it could lower the quality of care provided to enrollees by requiring community care organizations to contract with any willing provider, and it did not adequately address the long-term care needs of people with disabilities.

The conference at Johns Hopkins also featured the results of research and descriptions of capitated plans in Arizona, Minnesota, Maryland and Texas that have worked to improve health care for elderly and disabled Medicaid recipients during the past 20 years.—Tim Parsons

Conference Presentations

Public Affairs media contacts for the Johns Hopkins Bloomberg School of Public Health: Tim Parsons or Kenna Lowe at 410-955-6878 or paffairs@jhsph.edu.