CareFirst to End All Medicaid HMO Operations in Maryland
Following the collapse of its CarePartners provider network, CareFirst BlueCross BlueShield announced Jan. 3 that it will completely pull out of HealthChoice, Maryland's Medicaid program, on April 1, the Baltimore Sun reports. The decision comes three days after CareFirst ended its Medicare HMO operations in most of the state, a move first announced in October. The final pullout will affect 40,000 patients participating in CareFirst's FreeState Health Plan -- "almost all" of them from Baltimore. Beneficiaries will have to choose new HMOs by April. Deputy Health Secretary Debbie Chang said these individuals could continue seeing their regular doctor by choosing a health plan with which the doctor participates, but advocates for Medicaid enrollees expressed concern that the re-enrollment process would mean an interruption in care. In addition, several other Medicaid HMOs said that absorbing CareFirst's members could translate into financial losses.
Too Great a Risk
CareFirst's decision to completely pull out of HealthChoice was prompted by the "collapse" of CarePartners, a partnership where the University of Maryland Medical Center, Mercy Medical Center and Total Health Care "provided most of the care" for CareFirst's Baltimore Medicaid members and assumed "most of the risk for losses in the program." Last week, Mercy and University decided that those losses -- projected to be from $5 million to $7 million this year -- were too great to continue, and CareFirst "decided to exit altogether." The HMO said that it "could not absorb such significant losses alone" without rasing premiums for other CareFirst members. Both Mercy and University cited low reimbursement rates from the state in their decision to "leave the risk to the HMOs." Maryland uses a risk-adjustment method to set reimbursement rates based on what patients the HMO treats. Mercy and University said that despite an average reimbursement increase of 5.7% for this year, under the system their actual rates for treating Baltimore patients would decline under the revised formula. "The city rates were such that we didn't think we could afford to accept that kind of risk," Nelson Sabatini, executive vice president of the University of Maryland Medical System, said (Salganik, Baltimore Sun, 1/4).