Severe financial problems have prompted Maricopa County to shut down a health plan that has given thousands of senior citizens on Medicare low premiums and co-pays since 1993.
Maricopa Senior Select Plan’s 5,600 members were notified this month that the health plan will cease operations on Dec. 31.
Seniors were given a list of 10 plans they could switch to, but some members said they will be paying more than they did under Senior Select.
"It really upset me," said Beverly Mayberry, 70, of Mesa, who received a letter in the mail terminating her Senior Select membership. "It was a good plan. It took very good care of us."
Senior Select, however, has been suffering major financial losses, made worse by a broken billing system and federal sanctions that have prohibited the plan from adding new members for the last two years, said Shawn Nau, the county’s director for health care mandates.
The Centers for Medicare and Medicaid Services sanctioned Senior Select on Aug. 2, 2002, for problems, including late and inaccurate payments to medical providers. Problems have plagued all four of the county’s health plans due to poor management and a billing system that hasn’t worked correctly since it was installed in October 2002, according to county officials.
Left with a backlog of medical claims, Maricopa Integrated Health System has attempted to appease providers by distributing estimated payments until the billing operation is fixed. The county has contracted with a third-party administrator that is scheduled to take over claims processing by Dec. 31, said Mike Schaiberger, CEO of the county’s managed care system.
But Senior Select’s problems run deeper.
The health plan had a history of deficits, with the county subsidizing losses each year, said Nau. When Senior Select enrollment was capped, the plan had many older members who are high users of health services with no way to offset those costs by bringing in younger, healthier and thus less costly seniors.
There were also problems managing the plan’s medical costs and with the way the plan was structured, said Schaiberger. Instead of running the plan separately to address needs unique to seniors, the plan was combined with others operated by the county’s health system.
County officials projected that Senior Select would lose $3.4 million by Dec. 31. Instead, losses will reach $10.9 million.
"No one likes to admit failure with respect to a venture like this, but . . . there was no viable way to put in place a recovery plan," said Schaiberger.
The plan is being closed down as the county prepares to hand over its health system to a special health care district after the November election, when voters will fill the district’s five-member board. Last November, voters approved the district and funding of up to $40 million a year in property taxes.
Schaiberger said the county has been trying to shore up losses and fix the remaining health plans before transferring them to the district, but the repairs probably won’t be done by the time the system is transferred. Sanctions have also been placed on the county’s acute care Medicaid plan with the Arizona Health Care Cost Containment System, including an enrollment cap and a $500,000 fine in May. Schaiberger said he is hoping the cap can be lifted by March 2005.
Although no sanctions have been placed on the county’s plan through the Arizona Long Term Care System, significant efforts to fix the plan will be required, said Schaiberger. The plan is losing about $4 million a month. The county’s employee health plan, HealthSelect, has been transferred permanently to a selfinsured trust fund.