Cumberland Times-News

Local News

January 2, 2013

Health coverage choices narrowed by state rate decision

Company no longer enrolling individuals in Western Maryland

CUMBERLAND — A major player in the health insurance market for economically disadvantaged people will no longer offer new coverage for individuals in Western Maryland and other parts of the state. Priority Partners, a managed-care organization, will continue to cover people already enrolled in their programs, said Robert Neall, chief executive officer at Priority.

Cuts to the state’s reimbursements and a rural coverage incentive led to the decision, made in October, Neall said. The financial hit to the organization would be devastating and make continuing its programs untenable, he said. Statewide, the organization covers 227,000 members.

“In many of the rural areas, Priority Partners operates at a loss because the rates paid by the state to provide care is actually lower than the cost of care,” Neall wrote in a Dec. 14 letter to Delegate Kevin Kelly, explaining the situation.

“The main thing is the state cut our reimbursement rates ... and the Rural Access bonus, which was $12 million,” Neall said. Of the rural access funds, about 55 percent went to Priority.

In Kent County, for instance, priority has about 2,500 members, and lost almost $3 million on those members last year. The new rates set by the state would lead to losses of about $2 million a month, Neall said.

“It eliminated the incentive to stretch ourselves. It was a tough decision, because we remain committed to the whole state,” Neall said.

The state’s decision to effectively end the rural access program was in contradiction of the intentions of the General Assembly, Neall said in his letter to Kelly.

The General Assembly instructed the state Department of Health and Mental Hygiene to distribute the rural access funds to encourage more managed-care organization participation in rural areas. Instead, the “DHMH redistributed the RAI (Rural Access Incentive) funds to be included in the rates for every county except Baltimore City, essentially eliminating (the program),” Neall wrote.

The company ended new enrollments Jan. 1 for the Healthchoice and Primary Adult Care programs in Allegany, Garrett, Washington, Frederick, Cecil, Kent, Queen Anne, Somerset, Carroll, Calvert, Charles and St. Mary’s counties. The company offers no-cost and low-cost health insurance to those who qualify under state guidelines.

Priority provides health insurance coverage to about 450 people in Allegany County, 127 in Garrett County, 4,500 in Washington County and 8,600 in Frederick County. The other major players in the low-income, managed-care market are United Health Care and Maryland Physicians Care. MPC covers a larger number of people in Allegany and Garrett counties than Priority.

Contact Matthew Bieniek at mbieniek@times-news.com.

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