Jessica Mittler

Oil and water? Lessons from Maryland's effrort to protect safety net providers in moving to Medicaid managed care

Studies have highlighted the tensions that can arise between Medicaid managed care organizations and safety net providers. This article seeks to identify what other states can learn from Marylands effort to include protections for safety net providers in its Medicaid managed care program—HealthChoice. Under HealthChoice, traditional provider systems can sponsor managed care organizations, historical providers are assured of having a role, patients can self-refer and have open access to certain public health providers, and capitation rates are risk adjusted through the use of adjusted clinical groups and claims data. The article is based on a week-long site visit to Maryland in fall 1998 that was one part of a seven-state study. Marylands experience suggests that states have much to gain in the way of “good” public policy by considering the impact of their Medicaid managed care programs on the safety net, but states should not underestimate the challenges involved in balancing the need to protect the safety net with the need to contain costs and minimize the administrative burden on providers. No amount of protection can compensate for a poorly designed or implemented program. As the health care environment continues to change, so may the need for and the types of protections change. It also may be most difficult to guarantee adequate protections to those who need it most—among relatively financially insecure providers that have a limited management infrastructure and that depend heavily on Medicaid and the state for funds to care for the uninsured.