ROBERT L. EHRLICH, JR., Governor                            S.B. 819

In accordance with Article II, Section 17 of the Maryland Constitution, today I have
vetoed Senate Bill 819 - Department of Health and Mental Hygiene - Federal Waivers
- Waiver for Older Adults and Medicaid Managed Care Pilot Program.

Senate Bill 819 requires the Department of Health and Mental Hygiene (DHMH) to
apply to the Centers for Medicare and Medicaid Services (CMS) for a waiver to
establish the Community Choice Program, a managed care system designed to
provide long-term care services to eligible Medicaid enrollees. Under this model,
recipients are required to enroll in a community care organization (CCO), which
promotes the delivery of services in the most appropriate, cost-effective setting,
including nursing facilities and community-based services. The bill also requires
DHMH to apply for an amendment to expand the medical and financial eligibility
standards for the Older Adults Waiver Medicaid program. The Community Choice
Program as defined in Senate Bill 819 terminates May 31, 2008.

There are serious issues with regard to long-term care in the State of Maryland as
our senior citizen and disabled population continues to increase significantly. Many of
these individuals will need the help of the State to pay for long-term health care. The
State Medicaid program, however, will not be able to afford it. Today, approximately
30% of Medicaid's budget is used to cover long-term care costs for only 4% of
Medicaid's population.

I have decided to veto Senate Bill 819 because the State must build a Medicaid
long-term care program focused on consumers, and I believe this approach needs
more time for thoughtful consideration, collaboration, and planning prior to action.
Clearly, the current program, despite the resources we have dedicated to it, does not
meet the needs of Medicaid beneficiaries. It is too inflexible in how services are
provided. Accordingly, the State must seek federal regulatory relief in order to
construct a program that works. In this regard, please be assured this Administration
is interested in submitting a waiver for a long-term managed care program because
this program would offer significant benefits for the State and our citizens. In the
spirit of Olmstead, this kind of waiver offers more flexibility in delivering services in
the least restrictive setting, yielding more access to home and community-based
services. Additionally, this approach will provide savings that could be utilized for
other important State purposes, including the potential of reopening the Older Adults
Waiver.

Unfortunately, the rushed process surrounding the development of Senate Bill 819
did not allow for adequate consideration and development of a consensus approach to
this critical issue. While the Department of Health and Mental Hygiene strongly
supported an early version of the bill, the Department had significant concerns about
some of the amendments, ultimately forcing the Department to oppose the bill as
unworkable in its final form. The process necessary to develop an approach to solving
Maryland's crisis in long-term care requires the time, resources, and full
participation of all affected stakeholders and decision makers before embarking on a
major policy change as envisioned in Senate Bill 819.

In its final form, passage of Senate Bill 819 brings about four significant unintended
consequences. First, Senate Bill 819 could reduce access to care. The bill
unnecessarily regulates provider rates, e.g., it prohibits community care

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