LTC Bullet: HMOs Get Dose
of Medicaid Reality
Monday July 6, 1998
The New York Times reported today (7/6/98) that HMOs are getting
out of Medicaid managed care due to sharp cuts in Medicaid reimbursement
rates and resulting losses.
Several major HMOs including Aetna, U.S. Healthcare, Pacificare,
Oxford Health Plans, Kaiser Permanente, and Blue Cross and Blue
Shield Associations have terminated some of their Medicaid services
in at least 12 states: Arizona, California, Connecticut, Florida,
Massachusetts, Missouri, New Jersey, New York, North Carolina,
Ohio, Oregon and Utah.
Why? States have cut payments by up to 20 percent since the mid-1990s,
leaving HMOs--having enrolled nearly half of all Medicaid beneficiaries--looking
to cut their losses.
According to one New York HMO executive, the state's decision
to raise quality of care standards while cutting reimbursement
rates at the same time amounted to "a setup for failure."
The article points out that affected seniors may be forced to
seek care at Medicaid-only HMOs of suspect quality.
See the complete NYT story "H.M.O.'s Are Cutting Back Coverage
of the Poor and Elderly" at http://www.nytimes.com