Medicaid Rules Will Cost State $75 Million, Officials Say

Proposed federal rules to limit reimbursements under Medicaid would cost Maryland as much as $75 million and jeopardize services for as many as 200,000 people, state health officials said yesterday.

The rules, issued in December by the Centers for Medicare and Medicaid Services, affect case management services. Those are programs run by local health departments and nonprofit groups that provide home care for those with complex medical needs or disabilities and help them negotiate the insurance system or make the transition from nursing homes to the community.

The state spends about $150 million a year on case management, with the federal government paying about half. Medicaid is a state-federal health care program for the poor.

The proposed limits are intended to cut federal costs by reining in programs with large administrative costs, said John G. Folkemer, Maryland's deputy secretary for health-care financing. But he said the state's case management programs are critical to low-income residents and "are not wasting money."

The federal government is "narrowing the definition of what would qualify," Folkemer said after an emergency legislative hearing on the matter yesterday. "It's just excessive."

The regulations are scheduled to take effect in March.

State lawmakers and the administration of Gov. Martin O'Malley (D) are lobbying Maryland's congressional representatives to push a bill pending in Congress that would postpone the rules until 2009. Maryland's U.S. senators, Benjamin L. Cardin (D) and Barbara A. Mikulski (D), are co-sponsors of the bill.

Felice Hill of Bowie told a committee of state lawmakers yesterday that her 8-year-old son, Khari, who has cerebral palsy and other developmental problems, has flourished in a program called REM (Rare and Expensive Case Management).

Del. Peter A. Hammen (D-Baltimore), the House Health Committee chairman, called the rules "Draconian."

"It appears these regulations tear holes in the safety net we've worked so hard to create," he said.