S.C. moving Medicaid users into managed-care plans

COLUMBIA -- South Carolina is shepherding more than 560,000 Medicaid beneficiaries into managed-care plans in an effort to save money while providing better health care.

The rolling enrollment process, which starts Aug. 27, is expected to be completed by the end of 2008. Beneficiaries will still have the option of remaining in a traditional fee-for-service plan.

The state hopes moving more people to a managed-care system will curb spending by 5 percent to 15 percent from the more than $5 billion yearly Medicaid budget.

Much of these savings will come from cutting emergency room use for otherwise preventable or treatable illnesses.

"The No. 1 thing we pay for in the emergency room is ear infections," said Jeff Stensland, spokesman for the S.C. Department of Health and Human Services, which administers the Medicaid program.

The state's Medicaid program, which pays health-care costs for the state's poor, wants to find primary care physicians to track a patient's treatment.

"I think putting people (with a physician), so they don't go to the emergency room for primary care, is a good move," said Lynn Bailey, a Columbia-based health care economist. "Will it really get people out of the emergency room? No, no, not really."

Uninsured South Carolinians who don't qualify for Medicaid or Medicare estimated at 600,000 will continue visiting emergency rooms instead of a physician, said Patricia Smoak, vice president of the S.C. Hospital Association.

Nationally, about 60 percent of Medicaid beneficiaries are in a managed-care plan, according to health-care industry officials.

For two years, the state has tried enticing insurers to offer Medicaid managed-care plans, but with only modest success. Now, instead of waiting for insurers to lure beneficiaries, the state is moving nearly all its beneficiaries into managed care.

Most Medicaid beneficiaries can choose their own managed-care plan but will be assigned a plan if they do not choose one.

Not all of the state's 800,000 Medicaid beneficiaries, such as those in nursing homes, are eligible for managed-care coverage.

BlueChoice HealthPlan, a subsidiary of BlueCross BlueShield of South Carolina, is the first insurer to announce it is moving forward with plans to take part.

Other insurers, such as Unison Health Plan and Select Health, intend to take part. Up to 10 S.C. insurers are expected to offer Medicaid managed-care plans.

BlueChoice, which plans to start enrolling Midlands Medicaid beneficiaries in November, is setting up its network of physicians and community resource centers.

BlueChoice is hoping to attract 75,000 beneficiaries by setting up a statewide system of community resource centers that offer preventive care treatment.

"We want to be a good corporate citizen in the state," Blue Choice president Mary Mazzola Spivey said. "It is not a market we're touching today."

BlueCross might not be touching Medicaid now, but Bailey thinks there is another reason the state's largest health insurer is entering the market.

"BlueCross wouldn't be doing this if they didn't think they could make money," Bailey said. "It they were going to tap into the poor market, they would have more affordable products."