Washington Blade - August 8, 2003
Kevin Naff

Faced with a budget shortfall he blamed on excessive spending by the state legislature and former Gov. Parris Glendening (D), Ehrlich declared an end of the "era of credit card government" and announced $208 million in budget cuts on July 30, which were approved by the Board of Public Works.

The state's Department of Health & Mental Hygiene took the brunt of the cuts, with an $84.4 million reduction of its $3 billion budget.

Calls to Ehrlich's office were not returned by press time.

Officials with health clinics serving predominantly gay and lesbian patients expressed concerns about the cuts, particularly as they relate to a reduction in funding increases for Medicaid managed care organizations.

Dave Shippee, executive director of Chase Brexton Health Services, said he is disappointed in Ehrlich's budget cuts and cautioned that they could impact an array of services provided by Chase Brexton targeting Maryland gays.

"I'm dismayed that an overwhelming portion of the cuts are coming from the health department," he said, noting that the largest single impact of the cuts will come from a reduction in the reimbursement rates to MCOs. The result could be fewer treatment options for patients.

Chase Brexton is a non-profit community-based medical service provider centered in Baltimore's gay community. Chase Brexton currently sees about 6,000 patients in two locations, 1,400 of whom are HIV or AIDS patients, according to Shippee.

About 400,000 Marylanders are enrolled in Medicaid managed care programs; between 5,000-6,000 of those are HIV or AIDS patients. Medicaid is a federal-state program that provides medical coverage for low-income people.

When a patient becomes a Medicaid enrollee in Maryland, Shippee said, they are assigned to one of six managed care organizations. Each MCO is paid monthly based on the number of patients enrolled in its plan and the types of treatment their enrollees require.

According to Shippee, those MCOs were expecting a 2-to-3 percent funding increase from the state in 2004 to cover costs associated with inflation. But Ehrlich's budget calls for that increase to be reduced by 1 percent, saving an estimated $3.5 million. Shippee fears that these and other cuts will scare away the Medicaid managed care companies, thereby limiting choice for consumers.

"When you cut that rate by one third you give these organizations not a lot of incentive to stay in the business," Shippee said.

Experts fear consolidation

In fact, BlueCross BlueShield of Maryland got out of the Medicaid managed care business three years ago. The company was one of the largest providers, serving roughly 80,000 Marylanders, many of them on the Eastern Shore. Those patients had to be sent to one of the remaining programs. The result of this consolidation, Shippee said, is that patients living in rural areas of the state, including the Eastern Shore and western counties, will have fewer places to go for treatment.

That concern was echoed by Carol Christmeyer, deputy director of the Maryland AIDS Administration. She noted that when Medicaid providers register with the state, they can indicate which parts of the state they will cover so that all companies are not covering the entire state.

"If one [provider] were to leave the market and it happened to be one of two serving a rural area, then that would be of concern because it wouldn't leave people with any choice," Christmeyer said, adding that she is not aware of any provider that is currently contemplating leaving the Medicaid managed care program.

Christmeyer said the health department budget cuts were not a surprise.

"There have been discussions about cutting services for months," she said. Despite the cuts, she said she is not aware of any direct negative impact of the budget cuts on existing AIDS Administration programs but did express a concern over possible service cutbacks by case managers working for the managed care organizations.

Currently, case mangers proactively contact clients to assess their health care needs and status of care, but faced with budget cuts, these case managers may be forced to contact only those patients with more serious, complex health issues - including HIV and AIDS patients - Christmeyer said. Patients with less complex health issues could be expected to keep their case managers informed, rather than receive proactive calls, she added.

Full impact of cuts unclear

Don Gilmore, CEO of Amerigroup Maryland, the state's largest managed care organization, said he does not foresee that problem at his company but that it is a possibility for other MCOs.

"The HIV and AIDS cases are a high risk group and we have to stay on top of their care," Gilmore said, noting that patients at some MCOs with less serious health problems could see a decline in direct contact with case managers.

Amerigroup currently enrolls 127,000 Medicaid patients in Maryland, several hundred of whom are HIV or AIDS patients, Gilmore said. The company has a strong presence in the Baltimore-Washington corridor and covers most of the state, with the exception of Alleghany, Washington and Garrett counties in the western part of the state and Worcester County on the Eastern Shore.

"It appears we will see a rate increase that is less than medical trend and we'll have to manage to that," Gilmore said. He added that while Amerigroup does not plan to leave the state's Medicaid program, the recent budget cuts will have a greater impact on other plans.

"There are some MCOs that are financially challenged and that's a concern. Will this cause some of them to exit the program? No one's left the plan since May 2001."

Amerigroup is currently analyzing the full impact of the budget cuts, but Gilmore explained that because health benefits are state-mandated, there will not be a cut in services to clients.

"If the state has to make future cuts, there has to be a corresponding cut in state-mandated benefits," he said.

In addition to the cut in Medicaid funding increases, Shippee at Chase Brexton said state funds for his clinic's smoking cessation and breast and cervical cancer screening programs specifically for gays and lesbians are being scaled back as a result of Ehrlich's budget cuts.

The Whitman-Walker Clinic, which operates a health care facility in Takoma Park, Md., targeted primarily to gay and lesbian patients, served about 1,200 HIV/AIDS patients in 2002, according to Michael Cover, associate executive director for public affairs at the clinic. He noted that Whitman-Walker does not receive Maryland state funds for its gay and lesbian health care programs and thus would not be negatively impacted by the cuts.

Cover noted, however, that the full impact of Ehrlich's cuts is not clear yet and that he is concerned about any cuts that impact Medicaid.

"We're concerned overall about the status of Medicaid," Cover said, "it's a critical part of care for those living with HIV."

He added that protecting client access to Medicaid remains an important goal for Whitman-Walker.

Other cuts announced last week include $40 million from the University System of Maryland's nearly $800 million budget and the layoffs of 83 state employees; another 880 unfilled state jobs were cut. In addition, the state has cut $60,000 in funds to Baltimore's needle exchange program, which is credited with slowing HIV rates among drug users.

MORE INFO

Chase Brexton Health Services

1001 Cathedral St.

Baltimore, MD 21201

410-837-2050

www.chasebrexton.org

Whitman-Walker Clinic of Suburban Maryland

7676 New Hampshire Ave., Suite 411A

Takoma Park, MD 20912

301-408-5000

www.wwc.org

030808
WB030807

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