Washington County Health System, which owns Washington County Hospital and other local health care facilities, entered the agreement with the two other agencies to meet the new state requirements.
The agency would have been unable to continue accepting Medicaid patients without the agreement, said Horace W. Murphy, president of Washington County Health System.
Murphy said the change-over will be confusing for people on Medicaid because they are being told that they have to choose a managed care organization. Once they make the choice, he said Physicians Care doctors are in place to continue providing services.
Physicians Care will be one of four state-approved managed care organizations eligible to take area Medicaid patients. But Physicians Care is poised to inherit the thousands of Medicaid recipients receiving care from medical practices owned by Washington County Health System - including Potomac Street Community Health Center, Robinwood Internal Medicine and Smithsburg Family Medical Center.
Murphy said he wants Medicaid patients to "know we are here ... and we want to be their provider" under the new Physicians Care program.
John Costopoulos, spokesman for Washington County Hospital, said most doctors caring for Medicaid patients are or will be enrolled in the new program, and will be available to continue providing care.
Maryland's new plan, called HealthChoice, was created to replace traditional Medicaid insurance considered to be expensive and ineffective in promoting preventive care, said Barbara Shipnuck, who is in charge of state Medicaid policy for the Department of Health and Mental Hygiene.
Medicaid is funded by state and matching federal funds.
Until recent years, federal rules limited a state's ability to force Medicaid patients into managed care. The rules were designed to protect the poor against fraudulent medical systems by imposing commercial standards on Medicaid providers.
But throughout the 1980s, as managed care programs cut costs in commercial patient care, states pushed the federal government to allow mandatory managed care programs for Medicaid.
Shipnuck said Maryland's mandatory enrollment program is unique and will bring better health care to the state's roughly 350,000 residents eligible for Medicaid.
She said it is designed to push preventive care as a standard in health care delivery for the poor. This, she said, is different from traditional Medicaid programs which guaranteed health insurance but did little to encourage healthy lifestyles, such as good nutrition, prenatal care and good hygiene.
Out of a total state Medicaid budget of $2.3 billion, Shipnuck expects the state to save only $48 million in the first year - significantly lower than initial savings projections of $230 million.
But Shipnuck said concerns fleshed out in public hearings and by the state legislature encouraged the health department to incorporate outreach programs, which cost money. Outreach will include external quality reviews, surveys of patient satisfaction, consumer advisory boards and complaint hotlines.
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