Mismanaged care.

The move to push Medicaid recipients into managed-care programs has AIDS activists up in arms 

When city welfare workers reported to their offices in south Philadelphia on February 3, they were greeted by more than 100 chanting, placard-waving AIDS activists. First the demonstrators blocked the streets with a sit-in. Then they commandeered the welfare agency itself, tossing piles of HMO registration forms onto the floor and trampling them.

The incident was just one in a rash of demonstrations organized to protest a policy that is forcing all Medicaid patients in Pennsylvania into health maintenance organizations. Intended as a cost-cutting measure, the mandatory move of patients into HMOs began February 1 and is expected to be completed in July. The problem, according to AIDS activists, is that the managed-care approach employed by HMOs includes built-in incentives that can result in poor-quality care for people with AIDS.

Other states are eyeing similar mandatory programs, which could affect as many as half of all people with AIDS, since that's the proportion believed to rely on Medicaid. "It's a huge, frightening problem that's rearing its head all around the country," says Jeffrey Crowley, associate executive director of the National Association of People With AIDS, a Washington, D.C.-based advocacy group. Activists fear that HMOs may seek to restrict access to specialists or to expensive drugs and other therapies for AIDS patients. There is also concern that some HMOs may seek to avoid signing up people with AIDS because of their higher medical costs.

Under managed care, health care providers are reimbursed at a flat rate for every patient they enroll, regardless of the type of medical attention received. By contrast, Medicaid has traditionally been a "fee for service" program, meaning that doctors and hospitals are paid according to the services they provide as well as the number of people served.

So far only two states--Tennessee and now Pennsylvania--require all Medicaid patients, regardless of their condition, to sign up for an HMO. At least 17 states enroll some portion of their disabled Medicaid patients in HMOs, but many offer special exemptions for patients with severe needs, such as people with AIDS.

AIDS activists argue that w en HMOs care for chronically ill patients with intensive and expensive medical needs, they should be paid additional rates to compensate them for their extra care. Otherwise, they say, people with AIDS will represent too high a financial risk for both doctors and HMOs.

"From the history we know about HMOs so far, there is a lot of anecdotal evidence that people who are the most expensive to treat will be cut back on or cut out if there isn't some sort of fair compensation plan in place," says Bruce Flannery, executive director of the Pennsylvania Coalition of AIDS Service Organizations, a statewide association of AIDS agencies.

In Minnesota most disabled Medicaid patients are slowly being phased into mandatory managed-care programs--but with special provisions for compensating HMOs that care for the most expensive patients. "Moving people into managed care without providing risk adjustment for special-needs patients will create huge problems," warns Virginia Weslowski, supervisor of the Health Economics Program at the Minnesota health department. "Part of the problem will be with HMOs' discouraging such patients from enrolling in their programs, and there's anecdotal evidence all across the country that that's happening. But the bigger problem is that health plans will become extremely reluctant to develop good networks to care for people with chronic conditions. They don't want to make themselves too attractive to people with expensive, chronic needs because they won't get compensated enough for taking care of these people."

Like most people involved in mapping out the future of Medicaid for people with AIDS, Weslowski believes the managed-care approach will eventually factor into every state program. "The question isn't if it's going to happen," she says. "The question is when it's going to happen and, more important, how it's going to happen."

In Pennsylvania, AIDS activists and advocates are still struggling with how best to cope with that harsh reality. "Managed care is sort of an understandable evil," says Kevin Conare, the HIV-positive executive director of Action ADDS, the state's largest AIDS service organization. "We're not asking for the shutdown of HMOs. But there are a lot of important details that have to be worked out to protect people with HIV. We've had a lot of skirmishes over it," adds Conare, who along with other directors of Philadelphia AIDS organizations has been arrested in the series of demonstrations against the state's recent moves. "I think we're going to see a lot more skirmishes coming."

RELATED ARTICLE: Gore pushes for expanded access to HIV drugs under Medicaid

Even since the first stories began to emerge about a revolutionary new class of AIDS drugs called protease inhibitors, skeptics have been asking one question: Who's going to pay? Therapy with the new drugs is costly--from $12,000 to $20,000 annually per person--and for people without health insurance or whose insurance doesn't cover the drugs, there are few options. The AIDS Drug Assistance Program, administered on a state-by-state basis, is severely underfunded: The ADAP Working Group, a coalition of AIDS organizations and pharmaceutical companies, projects a shortfall of nearly $132 million for fiscal 1998.

Medicaid also covers protease inhibitors--but only for people who are indigent or who qualify as disabled, which usually means they have full-blown AIDS. Yet the drugs are most valuable when given before a person becomes symptomatic.

Activists have been pushing for an expansion of Medicaid eligibility rules to make the new drugs available to people with asymptomatic HIV. They received encouragement April 9 from Vice President Al Gore, who said he supports the notion of such expanded eligibility at a meeting with the AIDS Action Council, a national AIDS advocacy group. In fact, Gore said, he has already asked the Health Care Financing Administration to study the impact of such a move.

While the idea of expanding Medicaid might seem unrealistic in an area of budget cuts an spiraling medical costs, Gore emphasized the positive. "Our view is that getting these drugs to people earlier will not cost more in the long run," he told the crowd. Indeed, advocates say money spent on the drugs will show up as savings in treatment for those same patients later on.