Welles, Elaine
Philadelphia Tribune, The
10-31-2003
Nearly 300,000 enrollees in the HealthChoices managed care program living
in Philadelphia and surrounding suburban areas may be in jeopardy of
loosing health care services if the state cannot meet the funding
requirements of the program's provider, the Keystone Mercy Health Plan.
Officials of Keystone Mercy say they cannot make up the lost dollars that
would result if they accepted the state's proposal of a one percent
increase in subsidies, as opposed to the nine percent the company is
requesting, or the six percent they say is absolutely necessary.
If the state does not meet its costs, Keystone Mercy says it will pull out
of the subsidized care business and those in the HealthChoices program may
be forced to resort to a fee for a service system that seven years ago
resulted in the creation of programs such as HealthChoices. That
possibility could become reality early next year if an agreement can't be
met.
HealthChoices is one of three providers of managed care plans. AmeriChoice
and Health Partners are the other two. According to attorney Michael
Campbell, Health-Choices is, by far, the largest provider, having some
800,000 enrollees throughout the state.
Officials from Keystone Mercy met with the Philadelphia Tribune recently to
present their company's position in the current impasse with the state.
Even with an understanding of the fiscal difficulties that the state
currently faces, the care organization said its figures indicate that an
additional $50 million in state funds is needed to meet health care costs
for the remainder of the year. And, another $200 to $300 million is needed
to 'adequately' fund HealthChoices for 2004.
Keystone Mercy is a medical assistance managed care organization that
provides health care services to more than 250,000 medical assistance
recipients in five-county Philadelphia region. The company has a contract
with the Department of Public Welfare and each year, Keystone and DPW
negotiate payment rates.
Keystone Mercy says the Department of Welfare's one percent rate increase
does not reflect the rising costs of health care, and says the company
needs at least a six percent increase. The company said 10 percent of
returns from the state are used for administrative costs, with a large
percentage of the remainder going to health care providers.
Daniel Hilferty, president and CEO of Keystone Mercy, said the health plan
has saved the state 'hundreds of millions of dollars' over the years,
working with rate increases that have been sufficient for a 'modest
profit.' He said now, 'all we ask from the state is that they provide
adequate funding. If we don't get an adequate rate increase ... we cannot
participate in the program.'
Keystone Mercy, say the officials, will not subsidize the HealthChoices
program.
Stephanie Suran, a spokesperson from the Department of Welfare's Press and
Communications office said DPW has been negotiating with Keystone Mercy
about their contract. 'Right now, we are in open contract negotiations with
them. So, I cannot talk about specifics too much,' she said.
Rates of increase are being discussed, she said. 'They [Keystone] have been
offered rates that have been lower than they have been in the past couple
of years, but they [the rates] are actuarially sound ... It's in the lower
end of actuarially sound rates.'
'Right now, this is an ongoing contract negotiation and we are hopeful we
will be able to meet an agreement,' said Suran. 'The current agreement is
expected to expire on Dec. 31, but we are able to extend the contract
beyond that if discussions are ongoing.
'In any case, if they [Keystone Mercy] were to decide not to participate,
which we're hopeful we'll be able to get an agreement, they have to give us
120 days notice of formal termination.'
The current agreement with Keystone Mercy is expected to expire on Dec. 31,
2003. Suran said the Department has not reached the point of no-return. 'We
are hopeful that we will be able to meet an agreement,' she said.
Attorney Michael Campbell, director of the Pa. Health Law Project and legal
counsel for the Welfare Rights Organization, said 'it is very difficult for
a consumer to gage the validity of the claims' of Keystone Mercy. 'Whether
or not they actually need the money or how much they need is extremely
difficult for a consumer to judge,' he said.
However, the impact of Keystone Mercy's pull out from the program would
represent a 'major upheaval in the health care system for low-income
folks,' said Campbell.
'We work with people statewide in the Medicade system. What managed care
has meant to them is an introduction to a medical home, so they are not
relying on emergency rooms for service and they have access to specialty
care that was always difficult in the past. [This] is not to say that
managed care is some type of magic bullet that fixes everything ... but it
definitely represents improvement. To step back would be unwelcome by
consumers.'
Campbell said the budget passed so far by the state House includes an
initiative that would move everyone back into fee-for-services. A consumer
sub-committee of the state's medical assistance advisory committee has told
the Secretary of the Department of Welfare, Estelle Richman, that they are
very opposed to shifting the population back into a fee-for-service system.
'We have heard from Richman that she too is vehemently opposed to this,'
said Campbell.
Article copyright Philadelphia Tribune Company, Inc.
V.119
Philadelphia Tribune, The
10-31-2003
Nearly 300,000 enrollees in the HealthChoices managed care program living
in Philadelphia and surrounding suburban areas may be in jeopardy of
loosing health care services if the state cannot meet the funding
requirements of the program's provider, the Keystone Mercy Health Plan.
Officials of Keystone Mercy say they cannot make up the lost dollars that
would result if they accepted the state's proposal of a one percent
increase in subsidies, as opposed to the nine percent the company is
requesting, or the six percent they say is absolutely necessary.
If the state does not meet its costs, Keystone Mercy says it will pull out
of the subsidized care business and those in the HealthChoices program may
be forced to resort to a fee for a service system that seven years ago
resulted in the creation of programs such as HealthChoices. That
possibility could become reality early next year if an agreement can't be
met.
HealthChoices is one of three providers of managed care plans. AmeriChoice
and Health Partners are the other two. According to attorney Michael
Campbell, Health-Choices is, by far, the largest provider, having some
800,000 enrollees throughout the state.
Officials from Keystone Mercy met with the Philadelphia Tribune recently to
present their company's position in the current impasse with the state.
Even with an understanding of the fiscal difficulties that the state
currently faces, the care organization said its figures indicate that an
additional $50 million in state funds is needed to meet health care costs
for the remainder of the year. And, another $200 to $300 million is needed
to 'adequately' fund HealthChoices for 2004.
Keystone Mercy is a medical assistance managed care organization that
provides health care services to more than 250,000 medical assistance
recipients in five-county Philadelphia region. The company has a contract
with the Department of Public Welfare and each year, Keystone and DPW
negotiate payment rates.
Keystone Mercy says the Department of Welfare's one percent rate increase
does not reflect the rising costs of health care, and says the company
needs at least a six percent increase. The company said 10 percent of
returns from the state are used for administrative costs, with a large
percentage of the remainder going to health care providers.
Daniel Hilferty, president and CEO of Keystone Mercy, said the health plan
has saved the state 'hundreds of millions of dollars' over the years,
working with rate increases that have been sufficient for a 'modest
profit.' He said now, 'all we ask from the state is that they provide
adequate funding. If we don't get an adequate rate increase ... we cannot
participate in the program.'
Keystone Mercy, say the officials, will not subsidize the HealthChoices
program.
Stephanie Suran, a spokesperson from the Department of Welfare's Press and
Communications office said DPW has been negotiating with Keystone Mercy
about their contract. 'Right now, we are in open contract negotiations with
them. So, I cannot talk about specifics too much,' she said.
Rates of increase are being discussed, she said. 'They [Keystone] have been
offered rates that have been lower than they have been in the past couple
of years, but they [the rates] are actuarially sound ... It's in the lower
end of actuarially sound rates.'
'Right now, this is an ongoing contract negotiation and we are hopeful we
will be able to meet an agreement,' said Suran. 'The current agreement is
expected to expire on Dec. 31, but we are able to extend the contract
beyond that if discussions are ongoing.
'In any case, if they [Keystone Mercy] were to decide not to participate,
which we're hopeful we'll be able to get an agreement, they have to give us
120 days notice of formal termination.'
The current agreement with Keystone Mercy is expected to expire on Dec. 31,
2003. Suran said the Department has not reached the point of no-return. 'We
are hopeful that we will be able to meet an agreement,' she said.
Attorney Michael Campbell, director of the Pa. Health Law Project and legal
counsel for the Welfare Rights Organization, said 'it is very difficult for
a consumer to gage the validity of the claims' of Keystone Mercy. 'Whether
or not they actually need the money or how much they need is extremely
difficult for a consumer to judge,' he said.
However, the impact of Keystone Mercy's pull out from the program would
represent a 'major upheaval in the health care system for low-income
folks,' said Campbell.
'We work with people statewide in the Medicade system. What managed care
has meant to them is an introduction to a medical home, so they are not
relying on emergency rooms for service and they have access to specialty
care that was always difficult in the past. [This] is not to say that
managed care is some type of magic bullet that fixes everything ... but it
definitely represents improvement. To step back would be unwelcome by
consumers.'
Campbell said the budget passed so far by the state House includes an
initiative that would move everyone back into fee-for-services. A consumer
sub-committee of the state's medical assistance advisory committee has told
the Secretary of the Department of Welfare, Estelle Richman, that they are
very opposed to shifting the population back into a fee-for-service system.
'We have heard from Richman that she too is vehemently opposed to this,'
said Campbell.
Article copyright Philadelphia Tribune Company, Inc.
V.119
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