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Granholm wants 7.5% hike for Medicaid plans; But payment increase may not satisfy feds or fix problems.

Publication: Crain's Detroit Business
Publication Date: 15-MAR-04 		Format: Online - approximately 828 words
Delivery: Immediate Online Access
Full Article Title: Granholm wants 7.5% hike for Medicaid plans; But payment increase may not satisfy feds or fix problems.(News)

Article Excerpt
Byline: Katie Merx

Gov. Jennifer Granholm is recommending a 7.5 percent pay increase next year for health plans that serve Medicaid recipients, but that may not be enough to satisfy a federal agency that oversees Medicaid.

Michigan still may fall short of a 2003 federal mandate that requires states to pay Medicaid health plans enough to fulfill their duties to recipients and pay their bills without stripping reserves to cover costs.

Local HMOs have argued that Michigan's failure since 1997 to pay "actuarially sound'' rates to Medicaid plans has caused a $1 billion annual underfunding of the program.

That underfunding helped to send a handful of HMOs into state rehabilitation, including two Detroit plans, The Wellness Plan and OmniCare Health Plan. Rehabilitation is...

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